Absa Group’s new head is aiming to turn the bank’s retail unit into the biggest in South Africa, revamp its regional operations and bring stability to a firm that has seen six top managers in as many years.
CEO Kenny Fihla, who was poached from larger rival Standard Bank Group, also seeks to bolster non-interest revenue and return on equity at South Africa’s third-biggest lender by assets. Fihla will unveil his strategy to the board in the next couple of months, he said on Monday.
“This used to be an unbelievable institution and still is in many respects,” Fihla, 58, said in his first interview since taking over on 17 June. “But unfortunately, some of the challenges of successive leadership changes resulted in the organisation losing its sharpness when it comes to that external focus.”
The churning of CEOs — since Maria Ramos retired in 2019 — has weighed on Absa’s profitability, making it one of the worst performers out of the continent’s nine largest lenders. Fihla says management stability will help the bank’s 36 800 employees focus on clients and boost return on equity from 14.8%, which compares to 29% at Capitec Bank.
Johannesburg-based Absa earlier this year set a target to boost ROE to 15% in 2025.
In a 16-month period last year, Absa warned that its profit would lag expectations — thrice. That hit the shares, which have trailed most major rivals.
As part of the strategy to boost growth and woo investors, Fihla plans to entice customers. For instance, Absa will revamp and remove cash from some branches so that they don’t look like “prisons”, alluding to the security needed to keep money in the offices.
New executive hires
Absa has about 10 million active clients — similar to upstart digital rival Tyme Group. That compares with 24.1 million at Capitec, the biggest bank in terms of customers, while Standard Bank has 11.9 million in its personal and private banking unit.
The new CEO also plans to announce permanent executives at its retail and corporate and investment banking units, which currently have officers in an acting capacity.
Read: Kenny Fihla is new Absa CEO
The heads of these units will also be responsible for operations across all regions so that the organisation doesn’t move in “different directions from a geography point”, Fihla said.
“You want to make sure that you’ll treat clients more or less the same irrespective of the geography,” he said, adding that the bank would look at companies such as JPMorgan Chase & Co and Standard Chartered, which have been “exceptionally good” at that.
Absa also plans to increase market share in East Africa, and strengthen its West Africa operations. In Tanzania, where the lender currently operates two banks, it is considering streamlining its businesses, and sees Mozambique as a key market, which is likely to grow exponentially once much-awaited gas production starts.
Fihla, who plans to spend 30% of his time with clients, said that Absa offers him a platform to effect change.
“I think the potential to take this to the next level and help contribute in building one of the leading financial services organisations in Africa is massive here relative to what I could have done at Standard Bank.” — (c) 2025 Bloomberg LP
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