Banking giant Absa is caught up in another transformation storm after senior black executives confronted group CEO Arrie Rautenbach over recent critical senior appointments, including the planned removal of the head of the group’s Africa operations.
But the financial services group has defended the appointments announced last month, saying they were “meticulously crafted to propel our growth objectives and fortify our position in the market”.
Business Times understands from sources within the banking group that apart from the set of changes in April, senior black executives also oppose Rautenbach’s intention to remove Saviour Chibiya as head of regional operations in Africa.
Ruatenbach has announced internally that Chibiya, who began his banking career in Zambia, will be replaced by Ravin Dajee, head of Absa operations in Mauritius.
However, Chibiya is challenging the decision and this, together with a mini-revolt by some colleagues, is said to have stalled the personnel change.
A source close to Chibaya said he was arguing that the regional operations division had performed “exceptionally” on his watch.
“He is challenging the basis of his potential removal given the performance of regional operations, and those inside believe this is a pertinent question,” the source said. “Whatever the terms were, Chibiya did not accept them. [Rautenbach] could not remove him.”
Why would you remove a person who was successful in delivering against the group’s strategy and whose results boosted the entire organisation?
— Absa source
Chibiya’s division covers operations in such countries as Kenya, Ghana, Botswana, Mauritius, the Seychelles, Tanzania and Zambia. Africa operations contributed 44% of the group’s bottom line in the year to end-December, helping to cushion the group against the poor performance of its operations in South Africa.
In March Absa announced that headline earnings rose just 1% in the year, with bad debts rising sharply and profits dropping in its retail businesses. Headline earnings in South Africa dropped 18%, but its Africa region came to the rescue with a 124% increase.
Chibiya, a seasoned banker, was appointed head of regional operations in October 2021 after joining Absa in 2010 as MD and CEO of Barclays Bank Zambia, before the British bank’s separation from Absa. He previously served at Citigroup for nearly two decades.
As head of Africa operations, he is responsible for firming up the group’s overall growth strategy on the continent and supporting MDs in countries where the bank has operations.
Chibiya did not respond to calls and questions from Business Times sent via text.
A second source said Rautenbach’s plan did not make sense in view of the stellar showing of Chibiya’s division in financial 2023.
“Why would you remove a person who was successful in delivering against the group’s strategy and whose results boosted the entire organisation?”
This source said black executives had used an Absa management session led by Rautenbach and the group’s senior executive team on Monday to vent their frustration, and to question the choice of Dajee.
“Absa describes itself as a pan-African bank. How do you replace a person who represents East and West Africa with someone from a small market? The mood generally in the organisation is people are not happy about this appointment. People are not happy at executive level.”
Aggrieved executives are also said to have confronted Rautenbach over the other senior personnel changes announced last month.
Absa said Deon Raju, previously group chief risk officer and a former group treasurer, would assume the role of group FD. Raju, a chartered accountant with 20 years experience, succeeded Jason Quinn, who has moved to Nedbank as CEO.
Rajal Vaidya was named interim group chief risk officer, while Christine Wu replaced Cowyk Fox as CEO of the Everyday Banking business unit.
Absa said at the time the changes were “aimed at accelerating the execution of the group’s strategy to create superior commercial performance and enhance market competitiveness”.
But those with inside knowledge said the appointments had caused ructions because some believed proper processes were not followed and that the changes were a setback to transformation.
“It is clear they did not invite other candidates [to apply]. It was a matter of moving chairs. That kind of process for such a position deprives the company of getting competitive talent,” said one unhappy executive who asked not to be named.
This person described the appointments as contrary to the transformation objectives of the financial services sector, pointing out that no black African was appointed to any of the key roles. Punki Modise, current chief strategy & sustainability officer who has previously served as interim FD, was snubbed, this executive said.
“It looks like a deliberate move not to allow … other competent people and strong candidates to rise. People like Modise.”
Approached for comment on Friday, Absa said it stood by the rationale behind the changes announced last month.
“These decisions are meticulously crafted to propel our growth objectives and fortify our position in the market,” it said.
It looks like a deliberate move not to allow … other competent people and strong candidates to rise. People like [Punki] Modise
— Absa executive
“Moreover, they align with our steadfast commitment to advancing diversity, equity and inclusion initiatives, succession planning, and our robust talent management framework. This is an area where we have made a lot of progress in the last few years.”
Absa said its new appointments included individuals who had made significant contributions to transformation initiatives. “Their experience and dedication have played a pivotal role in shaping our trajectory.”
The group declined to comment on Chibiya’s pending removal, citing employer/employee confidentiality.
“We want to emphasise that we place the highest value on the privacy and confidentiality of our employees, reflecting our unwavering commitment to fostering a work environment built on trust and professionalism. To uphold this commitment, we enforce a strict policy against public discussion of internal employee matters. This policy underscores our dedication to maintaining a culture of mutual respect and discretion.”
Absa came under fire in 2022 for appointing Rautenbach to replace Daniel Mminele — its first black CEO, who lasted only 16 months in the role after clashing with the board over strategy and direction.
The Public Investment Corp, with a 5% stake in the banking group, expressed its disappointment at the time, describing the appointment as a “missed opportunity” to demonstrate a commitment to transformation.
“As a significant shareholder, the PIC expected the board would have placed the required focus on transformation in the process of recruiting a new CEO. This should be a key business risk for the board, considering the nature and breadth of services Absa provides to South African society,” it said.
After Raju was named FD in April, the Black Business Council (BBC) said it had been briefed by the Absa leadership on the context and rationale behind this appointment and others at lower levels.
“The BBC is cautiously satisfied that Absa is growing its own timber and has a relatively working succession plan,” it said. “The BBC will continue to engage and work with Absa on its long journey towards ensuring that the leadership … reflects sustainable diversity and is not motivated by ticking of boxes to gain broad-based BEE points.”
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