Absa locked in struggle to find Daniel Mminele’s replacement
DURBAN - ABSA is locked in a struggle to find a suitable replacement for its departing chief executive, Daniel Mminele, who is leaving at the end of the month under a cloud following a spectacular fallout with the bank’s powerful board chairperson, Wendy Lucas-Bull.
The lender is understood to be looking for a candidate who will give it credibility and stability after it came under fierce criticism this week for losing its first black chief executive.
Industry analysts say it will be difficult to replace Mminele who gave Absa both credibility and expertise.
Momentum Securities head of research Stephen Meintjes said Mminele’s replacement would ideally have to replicate his qualifications and aura.
Meintjies said the expedition would, however, not be easy as the former SA Reserve Bank deputy governor brought in and enjoyed an eagle eye’s view of the SA banking industry.
“Even if they are, Mminele’s replacement would have to navigate between the shoals of an agreed strategy on the one hand and differing executives’ views on implementation on the other,” Meintjes said.
Mminele, who was with the group for less than two years, disagreed with the board over the strategic direction that he wanted the bank to take, particularly after the Covid-19 outbreak had negatively impacted the banking sector, leading to a heavy fall in headline earnings. His abrupt resignation saw the bank’s shares tanking, declining more than 4 percent on Tuesday to closed lower at R120.68.
Absa immediately appointed its financial director Jason Quinn as the interim chief executive.
This week Lucas-Bull tried to downplay Mminele’s hasty departure.
Lucas-Bull said the parting of ways reflected divergent professional views and approaches. She described it as a “no fault” basis.
“The board has conveyed to Mminele its continued high regard for his competence and integrity.
“The parties believe that this course is in the best interests of the company and Mminele.
“This was a very difficult decision that was not reached lightly,” she said.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said Mminele’s departure was a big blow for Absa.
“It is clear from the announcement that the group is struggling to find its identity post the Barclays split,” Nair said.
Meintjes said Mminele’s resignation could open the way for an inside person who would be comfortable in embracing the strategy that was put in place before his appointment.
“The board has undoubtedly pointed itself in the direction of at least considering an internal appointment by possibly backing executives who were apparently looking to leave the bank because of differences with the chief executive,” he said.
“Given the sense of urgency as to implementation of the strategy, the replacement would already have to have an in-depth understanding of the industry and where Absa stood in it.”
Meintjes said Absa has an enormously valuable African footprint which requires an in-depth understanding of that market in order for the incoming chief executive to be successful.
Mminele was also disappointed with the turn of events and said it was regrettable that they should have had to part ways so soon on their journey.