The world is changing fast and to keep up you need local knowledge with global context.
One of my biggest surprises of the past year was seeing ABSA’s long-time CEO Maria Ramos’s resignation a few days after our interview in late January at the WEF meeting in Switzerland. As SA’s new president Cyril Ramaphosa was a regular visitor to the high profile ABSA presence on Davos’s Promenade, the immediate assumption was that Ramos had been called back to National Service. Whatever the motive, her departure at the end of February put an unlikely new CEO into the ABSA hot seat – former Nedbanker, ABSA main board director and erstwhile Registrar of Banks Rene van Wyk. For the past half year Van Wyk has kept a low profile ahead of the permanent new appointment taking over next year. But he’s been doing a lot more than keeping the seat warm, as I discovered in this fascinating chat at WEF Africa last week. – Alec Hogg
I’m in the ABSA dome at the World Economic Forum Africa summit with the chief executive of ABSA, Rene van Wyk. You’ve been appointed – not everybody knows much about you – but just the story, how did you come to be appointed?
It’s very simple. I retired from the Reserve Bank in May 2016 as Registrar of Banks and then I was asked to join the board as a non-executive in February 2017. I’ve been part of the ABSA group since then. It was also during this time that management came up with the new strategy and I was one of the keen supporters of this. With Maria’s retirement and us not yet having concluded the appointment of a permanent CEO, I was asked to step in and take care of the organisation until then. More importantly, we didn’t want the energy that was brought in by the management team to dissipate and I understood it very well. I’ve been in banking for a long time – I was with Nedbank for 19 years – so they asked me to do the job.
How do Nedbank feel about this?
I’ve been out of the Nedbank group since 2011 and then I became Registrar of Banks.
Your predecessor at the Registrar of Banks Errol Kruger is on the Nedbank Board so I hope you didn’t have any sharp words with you about going to the opposition.
No he didn’t.
I guess the obvious question is succession planning which is a key part of every organisation. Why did Maria leave without having someone in place? There’s all kinds of rumours.
Unfortunately there will always be rumours but we must look at the practical things. One is that we went through a separation and we needed to bed that down. Maria actually wanted to step down a lot earlier. She felt that as a CEO your maximum tenure is X years and she felt that it was the right thing to do. But then the separation happened. Because of the separation, we were free to determine our own future. Her team started their journey, so it was to land it and give it the impetus that it needed and then set her free to retire. We started a process when we knew Maria wanted to retire early and stopped this because she wanted to see this through. We then re-engaged it later. Those were the practical things that played out.
The rumours are not negative – they’re positive rumours – that she was being lined up for a Cabinet post or for at least another spell of national service. She is almost that on the sidelines.
I can’t answer that. In my conversations with her and the board, there’s never been a discussion of “I’m lined up elsewhere and I want to go and do that” certainly in my last meeting – having a casual chat – I said to make sure that you take a good break and she said “I’m going to”
How’s the process going of finding a permanent CEO?
It’s concluded. We’ve made a SENS announcement. The new permanent CEO will start on the 15th of January. We can’t make who it is public yet, because that’s the million dollar question, but we’ll probably be able to make an announcement later this year.
How do you go through a process like that? What does it entail?
It’s an executive search with a set of criteria from the board. It was very important that we selected a CEO that would not come in and think it’s all about them. This is not what we need. We need a CEO who will say “I’ve got the team, how do I support them?” We didn’t want a prima donna. We’re very comfortable with the team that we’ve got and it’s now about how you build them and support them. That was part of the selection criteria. Obviously we wanted somebody that knew banking, that’s not foreign to banking, so it’s not too difficult to see that our base for selection is quite small. We also wanted a South African. We went through a long process of identifying the individuals, talking to people that we thought could be candidates and eventually we landed the one that we feel that will be right.
We look forward to hearing the name in due course. The relationship between ABSA and the WEF has always been pretty strong. Maria made a statement of intent at Davos this year with ABSA’s positioning on the promenade and you’ve gone one step further in Cape Town, why? Where does this affinity come from?
I think this is quite logical in the sense that Barclays – still known as Barclays in the rest of Africa – has been there for a long time and so are we part of Africa. We see that as a huge opportunity. When I became CEO, I went to the countries visiting almost all of the branches, and it struck me like it’s never struck me before. It’s always been how banks follow the SA corporates into Africa. And it struck me that we’re missing a huge opportunity – South Africa doing business with Africa. And you see corporates in the country – corporates that you’ve never even heard of. I was in Uganda and I went to a company called Cipla – an Indian based company pharmaceutical – state of the art manufacturing plant. And they said “we want to branch off, we want to go into Ghana, we want to go into Zambia”. As Barclays or ABSA we have operations there and that’s when the penny dropped. They’re not talking about how they do business in South Africa. They’re talking about doing business with Africa.
And with an African Bank?
Yes, so that just marries exactly where we want to position ourselves.
Does it give you an advantage that you have such a strong retail base in South Africa and now having acquired the operations on the continent which Barclays have developed over many years?
I don’t think the retail base in South Africa helps you at all. And let me say why. I think each country is unique when it comes to retail. The product that you need, the demand of the products, home loans isn’t as big elsewhere in Africa as it is in South Africa, car finance isn’t as big as what it is in South Africa. Credit cards are still very low, overdrafts are still very low. So it is unique per country and you can’t say that is a recipe for Africa. So our strategy is to really make sure that we’ve got good management in each country and a good board and set them free. As opposed to the old way when it was run through Barclays – a product line that has to be cleared at the top before you can start acting. Now it’s about how we enable that strategy and release it in each country. Corporate is different. Just before our meeting I meet a client – Agility and they want to set up warehouse space – in Africa not in South Africa – and how they can use us. They want to see where we are in different countries. The beauty is that now we can facilitate that wherever we operate. We are going to look at how we do structured finance for them and now when a multinational that wants to use their facility there. And also enabling SMEs – it’s a 50/50 mix. We can finance them because they’re already locked into us. We know the bigger picture, we know their business. And so it’s a nice ecosystem that we’ve developed.
It’s quite extraordinary the leap that you’ve made – as you said in the beginning of this conversation – the idea that South African banks would follow South African corporates into Africa. And yet you’ve had a completely different mindset approach here. Do you think that’s an advantage in your longer term strategy?
I have huge respect for the other banks. They’re sharp. I don’t think we’ve gotten onto something that they don’t know. But I just think from a strategic thinking point of view – at least for me its obvious – focus more on Africa doing business with Africa as opposed to corporate SA doing business with Africa.
So what have you pulled out of Africa WEF? Do you go back to your office reflecting with more optimism about what’s going on in the continent given your investments there?
The WEF is but one element of it. Right now for us strategically, it has an additional purpose with the countries outside of South Africa. We are busy changing the brand name from Barclays to ABSA. This has to be completed by June 2020. We want to be ABSA but we have to go about it sensitively, because in many countries we’ve been there for over 100 years. To do it so that it is seen as something positive.
And the culture that you’re finding in other parts of the continent. They talk about the United States of America having 50 states and great differences in culture. Clearly in 54 countries in Africa there would be differences in culture as well. Have you found that a challenge in doing business?
Yes and no. There is no difference when I go to the countries to meet our team. Banking is banking. Especially when you go to the corporates, the needs are more or less the same. The difference comes into the cultural side when it gets to retail. There you have to be a little bit different. The way we are working with cell phone companies there, is not the way you will do it in South Africa. That’s culture and our approach is different. So you have to look at it in a unique way. Retail will be bespoke for every country.
Are you bringing many lessons back from other parts of the continent?
Yes, that’s the other thing that was good. We’re learning from that. What was really refreshing in Kenya is seeing people set free by unlocking innovation – otherwise it’s just by the book and it doesn’t work.
Are you going to go back onto the board after you finished?
That is the intention yes. But I have to go on a cooling off period that makes sense.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.