Leadership matters. More so when running complex institutions such as banks.
One of the most painful moments in South Africa’s banking history came in 2014 when African Bank was placed under curatorship by the South African Reserve Bank.
This was to avoid the lender’s demise. The guiding principle was to separate and remove the “good bank” from the “bad bank”.
The process was like an amputation performed to salvage as much as possible. The preceding years had seen steady progress with the bank getting back on its feet, with even ambitions of listing on the JSE.
It is thus disconcerting that leadership instability seems to plague the bank, with its current leadership seemingly oblivious to its not-so-distant past.
The board of the company, under Thabo Dloti, has not covered itself in glory. The dismissal of its CEO, Kennedy Bungane, who played a pivotal role in the turnaround of the bank, deserves closer scrutiny by the South African Reserve Bank, which owns nearly half of the lender as per its rescue package.
The Government Employees Pension Fund, which owns about a quarter of the bank, must also step up to the plate and demand answers on the abrupt dismissal of Bungane after five years in the role.
His departure, which was not amicable, also means the bank under Dloti is on course for its fifth CEO, either on an acting or permanent basis, in less than a decade. This, by all accounts, is a sign of a board all too happy to chop and change CEOs.
This paper reported on Monday that Bungane was pushed out at a highly charged directors’ affairs and governance committee meeting last week. The group’s poor first-quarter performance and a regulatory reporting mistake to the Prudential Authority (PA) were used to force his hand.
It is said that the bank also had a poor showing in the first quarter of its financial year (ending November 2025), a seasonally poor period for the banking sector.
These two reasons alone, at face value, do not warrant the summary dismissal of a CEO who has a track record of turning around companies.
This can only mean something terribly wrong has gone on in the top echelons of the company, something it is unwilling to publicly own up to.
The company, which just celebrated its 50th anniversary, deserves better. Shareholders and investors deserve better.
The way the company is managing the departure of its CEOs sends the wrong signal to the market that the lender might not be ready to go public.
It matters that Bungane’s predecessor, Basani Maluleke, also left under a cloud in 2021, following what Business Day reported at the time were personality clashes with Dloti.
Maluleke went on to become CEO of South Africa’s largest personal banking franchise, Capitec. Adding to the strange decision-making at board level, the Dloti-led board opted to appoint its head of business banking, Zweli Manyathi, as interim CEO — the group’s fourth CEO in eight years under the Dloti-led board.
While a celebrated banker with deep expertise, Manyathi is just five months away from reaching the bank’s retirement age, opening the door for a fifth CEO, whether in a permanent or acting capacity, in less than 10 years.
The way the company is managing the departure of its CEOs sends the wrong signal to the market that the lender might not be ready to go public. The African Bank board should heed the lessons coming from the corridors of Absa.
Absa went through a similar experience for about a decade, chopping and changing CEOs. All the while staff morale dropped, and with it the group’s performance.
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