Outgoing Absa chair Sello Moloko does not believe the brand took a knock from the leadership scandal in which former group CEO Arrie Rautenbach left in a huff.
Speaking publicly for the first time since it was announced he was stepping down, Moloko said the Absa brand remained strong, and the bank would not have attracted an executive of the calibre of Kenny Fihla to join as new CEO if the brand was damaged.
“The arrival of Kenny is also a signal, or a vote, of confidence ... if Absa was really broken and terrible, I don’t think we would have been able to attract such talent.”
Fihla will leave his job as deputy group CEO of Standard Bank to take over at Absa from June 17 as the institution’s second black group CEO. He comes in after a governance scandal that rocked Absa under Rautenbach, who some black executives accused of being anti-transformation.
Things came to a head when the board pushed back against his plan to remove Saviour Chibaya as head of Africa operations. Chibaya was being pushed out despite his division outperforming the rest of the group, reporting a 27% increase in headline earnings, which translated to a 44% contribution to the bottom line in 2023.
Rautenbach had been named CEO in 2022 to replace Daniel Mminele, who quit 16 months into his tenure after clashes with executives over the bank’s strategic direction.
Moloko denied he was being pushed out, saying he had asked to leave to focus on his personal business. He said he was happy to leave Absa with a strong leader about to join, a solid track record, and as a business that is clear about its operating model.
“While my tenure came to an end prematurely by choice, I think one has left the business at a place where key stakeholders, particularly investors, are excited about it.”
While my tenure came to an end prematurely by choice, I think one has left the business at a place where key stakeholders, particularly investors, are excited about it.
Moloko joined Absa as a nonexecutive director in December 2021.
He is being succeeded by René van Wyk, who briefly acted as group CEO in 2019 after the departure of Maria Ramos. Van Wyk, who chairs the board’s risk and capital management committees, played down speculation the board might not have been keen to see Absa led by a black CEO and chair. “In our succession plan, we make sure that we also cater for transformation,” he said.
“At no stage do we sit there and look at who’s black and who’s white. My personal view is that it would have been fantastic to have a black chairman and black CEO but unfortunately one has to deal with things that happen, and timing is not always under your control.”
Moloko said the group was committed to transformation, noting that with Fihla joining 63% of the board members would be black, and 44% women. The bank had three people on the succession slate for the next chair, two of whom were black, but had indicated they were not available to take on the role.
“The decision to appoint René was taken by the board; so the insinuation that there cannot be a black chair and a black CEO, I think, is an inappropriate extrapolation of the situation.”
Moloko said he would now have time to focus on the Thesele Group, an investment holding company he co-founded in 2005. “The impact on me and the demands on myself and on my time were such that I found myself at a critical point in my other business interests. Some of the challenges in Thesele require me to refocus my attention on saying what is important.
“Yes, Absa is important, but it is also important for me to give time and direction to Thesele in terms of repositioning and refocusing those business interests. Relative to Absa, they are small but for somebody about to turn 60, it becomes important to also protect value, and to protect the turnaround in that business.”
Moloko said he was not leaving Absa in the lurch, because the institution had mapped out a clear succession plan, as required by banking regulators. “I feel that with the challenges I’ve had in my personal business, the issue of divided loyalties is something that is not appropriate. I have got to be fair to Absa and step aside and allow someone with more time to be able to lead the organisation.”
Moloko said under his watch, the group had reset the retail business for growth, while improving its 2024 financial results. “We are sitting with a business that does not have gaps in leadership today, versus where I found it at the time. It is a business that is in a good space in terms of a very clear strategy, in terms of our retail model.
“We identified the things we needed to do to make sure we are able to meet the promises we made to the market of improving our return on equity, improving our earnings, and making sure that we reward the confidence the market [has] by giving them the kind of returns they expect.”
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