FirstRand CEO may herald shakeup

Johannesburg - The appointment of Sizwe Nxasana as FirstRand's CEO was widely expected, but analysts are now awaiting further clues of a shakeup at the financial services group.

"The appointment didn't come as a surprise; Nxasana is well respected both locally and internationally and (his appointment) could be viewed as a step in the right direction," said Francois du Plessis of Vega Asset Management.

Patrice Rassou of Sanlam Investment Managers thinks a black CEO will be to FirstRand's advantage.

"Standard Bank has had a long-term plan in place (of) black appointments in SA, while Absa and Nedbank did not appoint black heavyweights, which now leaves FirstRand in a strong position in terms of appointing a black CEO."

Rassou said: "It is difficult to know what Nxasana will do - let's see if he makes some of his own appointments at a senior level. Bear in mind that the controlling shareholders of FirstRand will not have changed."

Stephen Meintjes at broker Imara SP Reid doesn't think FirstRand's "culture of entrepreneurially managed divisions will, or should, change".

"I would look to the new head reviewing and improving the group's Africa footprint, as it is way behind Standard Bank."

Du Plessis agreed that FirstRand had lagged Standard Bank in developing an African strategy, saying that FirstRand only recently secured its first banking licence in Kenya.

Meintjes believes FirstRand will focus on risk management after trading losses in 2008 cost the group more than R1bn.

Rassou says the losses, incurred by the Rand Merchant Bank equities' trading unit, may have delayed the announcement of Nxasana's appointment.

The demands on banking management are increasing and Du Plessis welcomed Standard Bank's decision to appoint three deputy CEOs to assist Jacko Maree. He said: "An investor should attach a premium to Standard Bank which has deeper and broader management depth."

*The writer holds ordinary and preference shares in Standard Bank.

- Fin24.com