Sello Moloko, the chair of Absa, has told investors that media reports about erstwhile CEO Arrie Rautenbach’s leadership style ahead of his early retirement “strained” the lender’s reputation and relationship with stakeholders.
Moloko, in his letter to shareholders published in the group’s 2024 annual report, said the board had learnt lessons from Rautenbach’s exit.
“The group faced some challenges in 2024, with the intense media scrutiny and the early retirement of Arrie Rautenbach as group CEO. We acknowledge that these developments strained our reputation and our relationships with some stakeholders,” Moloko said.
“We have reflected deeply as a board and actively worked with the executive team on the necessary changes to restore confidence in and strengthen our group. As such, we have seen positive signs over the past few months that the work we have been doing as the board, together with management, to stabilise the organisation, is starting to pay off.”
The company’s full-year results showed the lender had a solid second half of the 2024 financial year, after Rautenbach’s early retirement.
His early retirement followed several media reports by Sunday Times that he had lost control of his executive committee and that his management style fell short.
The lender in August said Rautenbach had opted for early retirement after “discussions with the board”.
Charles Russon was appointed interim CEO of Absa and in the process became the sixth CEO, acting or permanent, of Absa, since 2019.
The bank last month launched a coup, appointing Standard Bank deputy CEO Kenny Fihla to the role, in a move Standard Bank CEO Sim Tshabalala described as a “blow” for Africa’s largest lender by assets.
The resignation of Fihla, who cemented his name in the industry during his successful tenure as head of Standard Bank’s corporate and investment banking unit, came as a surprise as he was assigned more clout in the bank just months before jumping ship.
His elevation to the role of deputy CEO saw him assume responsibility for both Standard Bank SA and the group’s Africa regions, with region CEOs Lungisa Fuzile and Yinka Sanni reporting to Fihla.
Due to the changes, Fuzile and Sanni lost their seats on the executive committee.
Moloko hailed the appointment of Fihla, who takes over the helm in June, with the mandate to take the lender back to its glory days after years of underperformance and leadership turmoil.
We have some work ahead as we actively seek to enhance employee engagement through deliberate and specific strategies to ensure that we create an environment where our diverse workforce can thrive.
“Kenny brings strong pan-African banking experience and a proven track record in delivering results in challenging times. He will strengthen our executive leadership and work with the team to stabilise the organisation and ensure we are well-positioned to meet both current and future demands,” he said.
“As the board, we are confident that his leadership will further enhance Absa’s positive momentum and our ability to deliver meaningful value to our clients and stakeholders.”
Fihla takes over at the time when the company is focused on the recovery of return on equity underpinned by growth in non-interest revenue and is reviewing its Retail SA businesses.
The bank, which has more than 55,000 local and foreign shareholders, is also experiencing a dip in employee satisfaction.
The annual report shows the employee experience index declined from 71.5 in 2023 to 64.6 in 2024, falling short of its target of 70.
Russon said management recognises the need for institutional change to shape new narratives that support a desired culture of performance.
“We have some work ahead as we actively seek to enhance employee engagement through deliberate and specific strategies to ensure that we create an environment where our diverse workforce can thrive,” he said.
“Our employees have rightly let us know of their dissatisfaction with our performance in our annual employee survey that was conducted in October. The challenging internal environment of the past year has undoubtedly influenced these outcomes, underscoring the need for us to focus our efforts for positive change through our culture transformation journey into 2025.”
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