African Bank, once the problem child of the industry, has picked an industry veteran as CEO to steer it through a pandemic-induced economic downturn in a sector shaken up by digital newcomer banks.
Kennedy Bungane, who started his career in banking at Standard Bank in 1991 and rose through the ranks to become head of its investment banking unit, replaces Basani Maluleke, who resigned abruptly in February.
Bungane inherits a company in the midst of a strategic growth push that includes bulking up its digital offerings and diversifying its product range to reduce its reliance on more risky unsecured loans.
His appointment comes when the industry is in the midst of, or just recovering from, the worst economic downturn in recent memory with consumers struggling to keep up with monthly loan repayments.
But Bungane said the bank, which was rehabilitated under the direction of the Reserve Bank after a near-death experience in 2014 when it was choking under a mountain of bad debts, is in great shape.
“We have a clean, liquid balance sheet and it has been endowed with a clear competitive advantage in the form of a modern technology platform free of legacy systems,” he told Business Day.
His mandate will be to continue transforming the banking group into a fully fledged financial services provider and to build on the competitive product offering put in place by his predecessors, Maluleke and Brian Riley.
But a significant element in Bungane’s job will include the transition of the interim shareholding regime, which sees the Reserve Bank owning half of the group with a consortium that includes the Public Investment Corporation (PIC) and large commercial banks.
This is an opportunity that cannot be wasted, said Bungane.
“The country and the market have cried out for a different sort of bank. We want to listen to all stakeholders around what that should be. In my view, the outcome should add to this unique value proposition for our clients,” Bungane, who also had a stint as head of Barclays’ African operations (excluding Absa) and oversaw the sale of the British lender’s sale of the businesses to Absa.
“I am grateful for the experience at the tier 1 banks. But I think it is an advantage to be in a smaller, more agile and unencumbered organisation like African Bank. We can move with speed and purpose,” he said.
He takes over at a time when the competition in banking is increasingly becoming fierce following the entry of app-only, digital banks such as Discovery Bank and TymeBank.
Bungane succeeds Maluleke, whose tenure as the first black woman to lead a commercial bank ends at the end of April following several clashes with chair Thabo Dloti.
Bungane said he is not fazed by what transpired. While he has worked with other board members of the bank previously, he has not dealt with the chair before.
“I think the board has a very clear understanding of good corporate governance and I am comfortable that I have consummate professionals to work with at both the board and executive level,” said Bungane.
Dloti, former CEO of Liberty Holdings, said this experience provides Bungane with “a good grasp of the strategic challenges facing the bank, within a muted SA economy and competitive landscape, as well as the required regulatory and governance framework”.
From June 2014 to February 2019, Bungane was CEO of investment holding company Phembani Group and led the merger of Shanduka with Phembani. He is also a past president of the Association of Black Securities and Investment Professionals.
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