ABSA CEO Daniel Mminele makes some strategic changes
Mminele took over the bank, which has been trying to improve performance since splitting from British parent Barclays in 2017, in January and a lingering question has been whether he would continue with the strategy set by long-time Absa boss Maria Ramos before her departure last year.
But in his first results presentation to analysts since taking over, Mminele said: “It has been almost two years since we began implementing this strategy, and we are now in a position to evaluate whether we are seeing the desired outcomes. In this regard, I have a full mandate to review our strategy and its execution and to make changes where necessary.”
Absa’s strategy encompassed a drive to win back market share lost while majority-owned by Barclays, and to grow its business across Africa. It set itself a series of ambitious targets in order to achieve this.
But like its peers, Absa faces an economy characterised by stagnant growth, high unemployment and rising living costs, and which tipped into recession in the final quarter of last year.
It warned yesterday that it would take longer to achieve its 18percent to 20percent return on equity target by 2021 as planned as a result, with this anticipated in 2022 at the earliest.
The bank's headline earnings per share (Heps) stood at 1750.1cents in the year to December 31, compared with 1703.7c a year earlier.
However, on a normalised basis, which accounts for the impact of its split from former parent Britain's Barclays in 2017, Heps rose by only 1 percent.
Absa’s South African retail bank - the engine of its operation - saw a 2 percent decline in earnings, hurt by rising bad debts.
The group's credit impairment charge increased by 24 percent, mirroring a similar spike across its peers.