Absa, Nedbank and FNB have all appointed new Chief Executive Officers (CEOs).
South African banks have been the primary benefit of the rally in South African equities.
South Africa’s market has responded positively to the Government of National Unity (GNU) formation between the ANC and nine other parties, most notably the market-friendly DA and IFP.
The local bourse has also reaped the rewards of potential interest rate cuts, with the South African Reserve Bank (SARB) likely to cut the repo rate from its 15-year high of 8.25%.
“With imminent interest rate cuts and declining global inflation, we have seen renewed interest in the rand and the stock market, and we think valuations look very attractive, especially in domestic sectors like the banks,” said James Johnstone, co-head of emerging and frontier markets at Redwheel.
Three of South Africa’s “Big Four” banks will have new leadership amid the boom for banks.
Jason Quinn has been appointed as the new CEO of Nedbank; Harry Kellan has taken over at FNB, and Charles Russon will take over as ABSA CEO on an interim basis next month.
Nedbank
Quinn took over from Mike Brown as Chief Executive on 31 May 2024.
Quinn was previously Absa’s financial director and interim CEO from April 2021 to March 2022.
He is a chartered accountant and worked at Ernst & Young from 1992 till 2008 before joining Absa.
Nedbank chairperson Daniel Mminele said the board is delighted to have secured the services of an experienced leader of Quinn’s calibre.
“He (Quinn) has a proven track record in banking in South Africa and other parts of Africa to build upon Mike Brown’s legacy,” said Nedbank chairperson and former Absa CEO Daniel Mminele.
Quinn takes over amid a strong financial performance. In the first half of 2024, headline earnings increased by 8% year-on-year to R7.9 billion.
Good non-interest revenue growth, a lower impairment charge and tight cost control underpinned the increase in headline earnings.
Quinn said he is optimistic about the potential benefits of South Africa’s new GNU and improved macroeconomic conditions in the second half of 2024.
“On the back of an improving operating environment, we continue to aspire to deliver ongoing improvements in ROE to increase shareholder value,” said Quinn.
“Our strong financial performance in H1 2024, together with the progress made in executing our strategy and better economic prospects, gives us confidence in making progress towards our medium-term targets, particularly our aim to increase our ROE to 17% by 2025 and above 18% in the long term.”
FNB
Kellan took over as FNB CEO on 1 April 2024, from Jacques Celliers.
He was previously the CFO of FNB’s parent group, FirstRand, for ten years.
Kellan joined FNB in 2005 and spent seven years as CFO. He was then appointed FirstRand CFO in 2014.
FirstRand said that Kellan’s long tenure at FNB before his group role puts him in a good position to now lead the largest customer franchise in the portfolio.
As a long-standing retail and commercial executive committee member and the FNB advisory board member, Kellan has helped shape many of FNB’s key strategies.
Kellan takes over at a better-than-expected time for FirstRand, with the group benefiting from FNB’s continued focus on cost management.
However, in a trading statement for the first six months of 2024, the group noted that UK authorities are investigating the historical use of discretionary commission arrangements and sales by mainstream lenders in the UK motor finance market.
Due to the uncertainty, the group raised an accounting provision based on its probability-weighted scenario principles, which it constructed from its data analysis. This provision includes potential legal and redress costs.
As a result of the provision, the group said that its Earnings per share are expected to grow by between 1% and 8%, while Headline earnings per share should increase by between 1% and 5%:
Absa
Russon will become Interim CEO of Absa Group and Absa Bank on 15 October 2024, subject to regulatory approval. He will also set to become an executive director on the boards.
Russon is currently the Chief Executive of Absa’s Corporate and Investment Bank (CIB), having served since 2018. He has also been a member of the Group Executive Committee since 2014.
He joined Absa Capital in 2006 as CFO and has held several senior roles at the group, including Regional Head of Finance, Chief Operating Officer, and Chief Executive of Engineering Services.
He previously wrote articles for KPMG and worked for Merrill Lynch and Deutsche Bank in London and Frankfurt.
Like Quinn and Kellan, Russon is a Chartered Accountant.
Russon takes over from CEO Arrie Rautenbach, who will retire early from the group effective 15 April 2025.
Rautenbach will also cease to be the CEO and an Executive Director, effective 15 October 2024.
He will have to serve a six-month contractual notice period, which will be served as garden leave before he retires.
Rautenbach’s early retirement comes after the group’s headline earnings per share dropped by 5% to 1,228.4 cents in the first six months of 2024.
Read: How much you would have if you invested R1,000 in Absa, Nedbank, Standard Bank and more at the start of 2024
