Johannesburg - In the long run, the appointment of Absa CEO Maria Ramos to the Barclays group executive committee may be a boon for the bank, but it does them no favours in the short term, analysts have said.
Barclays Group CEO John Varley announced the appointment on Wednesday as part of a restructuring. Ramos remains Absa CEO.
Patrice Rassou, a portfolio manager at Sanlam Investment Management, expressed surprise. He said: "She [Ramos] needs to get to grips with the business here."
Since Ramos was appointed as Absa CEO in late 2008, the bank has seen the departure of a number of high-profile and experienced executives. This includes Gill Marcus, the recently appointed head of the South African Reserve Bank, group financial director Jacques Schindehütte and chief operating officer Peter Mageza.
On top of this, Absa investment banking big gun John Vitalo - former head of Absa Capital - has been reassigned to lead the Barclays operations in the Middle East.
This has left Absa with gaping holes in its own executive management and investors will be questioning whether the bank can afford to have Ramos' attention diverted.
Absa, which is 55% owned by Barclays, previously fell under the former Barclays Global Retail and Commercial Banking (GRCB) business cluster and Ramos reported to GRCB CEO Frits Seegers.
Seegers has since stepped down to pursue other business interests.
"The appointment of a permanent non-executive chairperson is quite a pressing issue at Absa; this may give Barclays a bit more say in the appointment," said Francois du Plessis of asset management firm Vega Capital.
Du Plessis used the example of the recent appointment of Sir John Parker to the Anglo American board, showing how critical strong leadership was for one of South Africa's largest companies. Parker has chaired four of the top 100 listed companies in the UK.
He said: "You need a heavyweight chairman - one has only to look at the announcement yesterday from RBS and Lloyds to see that the storm is not yet passed for banking groups."
On Tuesday UK banking giants Royal Bank of Scotland and Lloyds received a second bailout of £31m from the UK government.
Both Du Plessis and Rassou believed the appointment would be beneficial for the alignment of Barclays and Absa operations on the African continent - a part of the relationship between the two groups which has not yet taken off.
The two groups are battling to work out how they could grow their offerings in Africa without competing.
In its press statement, Absa emphasised its independence. It said: "Absa remains a member of the Barclays group with its own mandate to manage its businesses as efficiently and effectively as possible, while endeavouring to meet the growing needs of its customers."
- Fin24.com