Shares of South African Financial Services Group, Absa Group Limited, rallied the most among its peers Tuesday in the wake of Maria Ramos’ announcement on retiring in February, after a decade of service as Chief.
Absa shares gained 6.08 percent to close at 18,628 rand at the close of trading on the Johannesburg Stock Exchange (JSE) Tuesday, January 29.
According to Bloomberg, the share which has jumped 11 percent this year, outperforming the six-member FTSE/JSE Africa Banks Index, climbed as much as 3.9 percent to 182.39 rand, the highest since May 2018, before paring gains to trade 2.5 percent up at 180.02 rand as of 1:50 p.m. in Johannesburg.
Absa, once-upon-a-time the largest mortgage lender in South Africa lost significant retail market share in the aftermath of an alliance which gave Britain’s Barclays control in 2005.
Following Barclay’s decision to leave the African market in the wake of the 2008 global financial crisis, Absa has made regaining its previous status a top priority. In 2013, the Group acquired eight of Barclays African units for a record 18.3 billion rand ($1.3 billion).
Ramos restructured the retail and business banking unit as she brought in the new management team to revitalize the Absa brand in a bid to stage a comeback of South Africa’s third-biggest lender.
‘’The groundwork laid in the past year by Ramos removed uncertainty around Absa’s future and made the CEO post more attractive to potential successors,’’ Chairperson of Absa Group, Lucas-Bull told Bloomberg.
‘’Ramos’ successor should be announced by the time Absa publishes its first-half earnings in about six months from now, Lucas-Bull said, with the person expected to take office in the new financial year,’’ Lucas added.
Ramos, who would turn 60 when she retires in February, explained that her retirement was to allow for new leadership to take the group through its next phase.
‘’It had never been my intention to stay this long, as I have always believed that a CEO’s tenure should allow for a regular refresh,” Ramos said in a media release.
“My earlier intentions to step down were curtailed by Barclays’s 2016 decision to sell down their controlling stake, a unique set of circumstances that required continuity. So with my coming 60th birthday, I have made the decision to leave the position open for a new CE to lead the group on the next leg of its exciting journey,” she further stated.
In Ramos’ stead, René van Wyk, Reserve Bank’s former registrar of banks and a member of the Absa Board since February 2017, would serve as interim CEO from March 1 until a permanent appointment is announced.
Reacting to the announcement, Absa group acknowledged Ramos’ long service in ‘’leading the group through significant milestones, including the aftermath of the global financial crisis and acquiring the Barclays Africa subsidiary banks in 2013.”
The group further explained that the timing of her retirement was belated, as the Barclay take-over required her leadership to ensure it was successful adding that the confidence in the progress made so far, informed Ramos’ decision to call it quits.
“She had indicated a desire to step down earlier, but agreed to see the group through the separation negotiations with Barclays, the ensuing sell-down and key separation milestones, including Barclays achieving regulatory deconsolidation and refreshing Absa’s brand identity,’’ Absa added.
SEGUN ADAMS
