South Africa’s banking industry found itself in an uproar the night of March 16, when the heir apparent of its largest bank—and the continent’s—quit to take the helm of a crosstown rival.
Kenny Fihla, group deputy CEO of Standard Bank, CEO of its South African unit, and considered next in line to succeed CEO Sim Tshabalala, resigned that night; next day, he was named group CEO of rival Absa Bank.
Stung by the unexpected move, Standard Bank dispatched Fihla on paid leave until June 13, shortly before he is to assume his new position. In a statement, the lender admitted that his departure was a “heavy blow.”
Over a two-decade career at Standard Bank, Fihla rose to head its flagship corporate and investment banking division, where he presided over a doubling of headline earnings to R20.5 billion ($1.1 billion). Last September, he was appointed group deputy CEO.
His decision to jump ship is a major plus for Absa Bank. Under the stewardship of interim Group CEO Charles Russon for the past six months, Absa is hoping for stability at the corner office after a prolonged period of turmoil.
“Kenny is a recognized leader with substantial Pan-African banking experience, has relationships across the banking and financial ecosystem, and a proven track record to drive results in complex environments,” Sello Moloko, Absa board chairman, said. Fihla, who will take over on June 17 subject to regulatory approval, has a tough job ahead.
Considered a sleeping giant, Absa posted a 5% decline in headline earnings for the first half of last year. It rebounded in the second half, closing the year with a 10% increase, to R22.1 billion. Return on equity posted marginal growth, from 14.4% in the first half to 14.8% in the second half of the year.
While the bank posted growth across all business units, including its regional operations, the rate of growth has been sluggish. Case in point is the number of customers, which increased by a mere 4% to 12.7 million across its 10 markets. Corporate and Investment Banking, a critical unit, posted 6% growth in earnings. Fihla, whose appointment has thus far been received with enthusiasm, has committed to bringing a new dynamism to Absa, promising “forward-thinking strategies.”
