Outgoing Absa chief executive Daniel Mminele was forced out of his position after he disagreed with the board, chairperson Wendy Lucas-Bull in particular.
Business Report can today reveal that Mminele was not given an option but had to leave over the differences on the strategic direction that he wanted the bank to take.
Insiders claim that Mminele and Lucas-Bull clashed over the strategy that was already there when he joined in January last year.
One claimed that the former SA Reserve Bank deputy governor wanted to adopt a more cautious and phased approach, given the impact of Covid19 on its bottom line.
He is also said to have preferred the consolidation of the bank’s market share in South Africa after it took a hit following a 5-year dalliance with Barclays. “It was only a matter of time before he (Mminele) left,” another said. “He was never given a free rein to lead the bank’s strategy.”
Last week, Business Report reported on the escalating tensions between Mminele and Lucas-Bull.
In a meeting that dragged for hours on Monday, Mminele was allegedly told that the differences had become so huge that he had to leave.
In 2019 Absa had $3 billion (R42.73bn) in annual retail revenue and 632 branches across 12 countries, having grown its retail deposits by a compounded annual growth rate of 9.6 percent between 2016 and 2019. Today, the bank is valued at about R105bn.
Mminele also lost a key ally in Peter Matlare, the affable deputy chief executive who died of Covid-19 complications last month.
“He was left to fight on his own,” a source said. “That took a heavy toll on him.”
Yesterday, Absa stock tumbled as news of Mminele’s imminent departure flooded the market. The stock closed 4.43 percent lower at R120.68 on the JSE yesterday.
The bank had gradually been ceding market share to its peers in core retail categories such as credit cards and mortgages and could not optimise its large network size and capital structure in an emerging market.
In February, Absa warned the market that its earnings for the year to end December would fall by more than it had earlier anticipated, with the Covid-19 outbreak continuing to have a negative impact.
The group said it expected its headline earnings per share (Heps) and earnings per share (Eps) to tumble between 55 and 60 percent, compared with Heps of 1 750.1 cents a share and Eps of 1 717.6c reported last year.
Another senior executive said that Lucas-Bull wanted some of the major executive decisions to be run by her.
“Wendy Lucas-Bull wanted to be both the chairperson and the chief executive,” the executive said. “That way the relationship was never going to end in joy.”
Lucas-Bull and former longtime chief executive Maria Ramos oversaw the merger with Barclays Bank, with the London-based lender buying a 55 percent stake in Absa, which was incorporated as Barclays Africa in 2013.
However, at the beginning of the year 2016, tensions ran high as Barclays said it was planning to get out of its investments in Africa.
Despite Absa denying the rumours, Barclays head Jes Staley officially announced that the bank planned to exit its African operations to focus on business in the US and the UK.
Yesterday, Lucas-Bull said the board had reached an agreement with Mminele to step down at the end of the month.
“The parties believe that this course is in the best interests of the company and Mminele,” Lucas-Bull said. “This was a very difficult decision that was not reached lightly.”
The group said it had appointed its financial director, Jason Quinn, as interim group chief executive with immediate effect.
Mminele said: “It is indeed regrettable that we should have had to part ways so soon on our journey. It is, however, important for the chief executive to be in complete alignment with
the board on critical issues such as strategy and culture. I became enamoured of the brave, passionate and ready people of Absa and wish the group well for the future.”
BUSINESS REPORT ONLINE