Absa shares have outperformed the market since Kenny Fihla took the reins at the lender in June — an appointment that has brought about leadership stability at the group prone to C-suite skirmishes.
The outperformance of Absa shares on the JSE had become a rare occurrence over the years, with Standard Bank, FirstRand and Capitec as consistent top performers.
The group’s share price has rallied nearly 30% since June, with it once again breaching the R200bn valuation mark.
FirstRand, the country’s largest bank by market valuation, is up 16% in the same period, while Standard Bank is up 17% and Capitec 13%. Nedbank has edged up just 3% in what has been an underwhelming year for the green bank’s share price, down 9% for the year to date.
Shares in niche private-banking and wealth management group Investec have also underwhelmed this year, down about 7% in the period. The Anglo-South lender launched a R2.5bn share buyback programme in August.
This week, Fihla unveiled the key elements of the group’s strategy, which rests on four pillars: customer-led growth, building a diversified pan-African business, driving excellence and pursuing new growth opportunities.
At the heart of the strategy rejig is the lender’s need to wean itself off dependence on South Africa, Kenya and Ghana for earnings, with the group’s corporate and investment banking unit set to play a leading role in the earnings diversification push.
Fihla has tapped his former employer, Standard Bank, for top talent to fill key roles in his management team.
In September, Absa appointed Zaid Moola as CEO of its corporate and investment banking (CIB) division, poaching him from Standard Bank, where he led the global markets unit, which recently recorded a record profit of R5.4bn in the six months to end-June, a surge of 64% from the previous period.
Absa also appointed Musa Motloung as group strategic risk officer, joining from Standard Bank, where he has held the role of chief risk officer in the CIB business. Motloung will report to the chief risk officer, Rajal Vaidya.
To wean itself off its dependence on South Africa, Ghana and Kenya for the lion’s share of its earnings, Absa has now targeted Uganda, Tanzania and Mozambique.
One of Fihla’s first stops as CEO was Uganda. The group plans to merge its two businesses in Tanzania to build scale.
One of the first transactions concluded under his stewardship was Absa’s purchase of Standard Chartered’s wealth and retail banking businesses in Uganda for an undisclosed amount, a huge leap in the group’s plan to grow its East Africa business.
The deal came a year after British multinational banking major Standard Chartered laid out plans to exit wealth and retail operations in Botswana, Uganda and Zambia to free up capital, amid a broad shake-up.
Absa also plans to merge its two businesses in Tanzania to build scale. To have laser focus on building the group’s Pan-African growth ambitions, Fihla appointed Charles Russon as CEO of Africa regions in October.
Absa is also present in Botswana, Mauritius, Zambia and the Seychelles.
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