Absa Rejigs Corporate and Investment Bank to Hone African Focus
JOHANNESBURG (Capital Markets in Africa) – Absa Group Ltd. has overhauled the executive management of its corporate and investment banking unit as part of an ongoing group-wide revamp to draw more revenue from operations in Africa.
The team of eight, which includes former joint-chief executive officers of the division, Mike Harvey and Temi Ofong, now have a mandate to drive business across the entire African continent, Absa CIB CEO Charles Russon said in an interview in Johannesburg. The move has dramatically reduced the number of staff reporting directly to Russon to provide simplicity, said the executive, who started leading the business in November.
“Coming into it I saw quite a complex structure that leads to quite a bit of difficulty in weaving your way through it,” he said. The new structure gives top managers more accountability for the activities of their business divisions because, “the speed and velocity at which we service our clients really needs to step up if we want to win in this space,” he added.
Absa embarked on a process to flatten its structures, improve its product offerings and client retention rates about a year ago as it broke away from its former parent Barclays Plc. A similar exercise was undertaken at the lender’s retail and business bank after it received a new chief in March 2018. The company wants to grow revenue faster than competitors such as Standard Bank Group Ltd. and Nedbank Group Ltd. and is turning to Africa as economic activity in its home market slows.
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Russon is also introducing four business-generating divisions for transactional banking, client coverage, public sector and growth-capital solutions, and investment banking, according to a memo circulated internally to staff and sent to Bloomberg. Executives will now have to rapidly review their portfolios to align initiatives with the unit’s broader strategy, Russon said.
As Absa seeks to boost growth, it will target clients in mining and minerals, agriculture, power and utilities, natural resources and consumer businesses, Russon said, adding that the lender wants to grow more in commercial property finance and structured-trade finance. It will also look to accelerate the expansion of its existing business in Nigeria where it has had a limited presence, and in countries where it has no presence like Angola and Egypt, he said.
“We need to be very clear and deliberate in terms of our Nigerian strategy and then execute,” he said. “Nigeria is such an important country in the African economy.”
Absa and France’s Societe Generale SA said in January they agreed to partner in wholesale banking on the continent, with a special focus on Chinese companies. The venture will give the company greater geographic reach: SocGen and Absa currently have presence in 19 and 12 African countries respectively, with little overlap. Africa has been a key destination for capital under China’s Belt and Road Initiative, which aims to develop roads, railways, ports and other trade links.
Source: Bloomberg Business News