May 24, 2004

By Sherilee Bridge

Johannesburg - Absa's chief executive designate Steve Booysen was not even a year old when his predecessor, Nallie Bosman, joined Volkskas as a clerk in 1963.

And bookies would not have given Booysen, Bosman's fresh-faced 41-year-old protégé, great odds of being given the big office when Bosman finally leaves the country's biggest retail bank in August.

The smart money would rather have gone on Rupert Pardoe, the 47-year-old former Anglo American finance director who, in the run-up to the announcement, was tipped as Bosman's natural heir apparent.

Pardoe was appointed deputy chief executive a year ago when the subject of who would succeed Bosman was fuelling speculation in banking circles. This was seen as a clear sign that he was in line for the big job.

Pardoe was backed by the large institutional shareholders. But where he was still seen as an outsider in the bank, Booysen enjoyed the support of his colleagues, insiders said.

And Booysen's appointment seems to have been welcomed by many, including banking analysts.

The fact that Booysen, a former academic at the University of South Africa, has already put in 16 years with Absa stands him in good stead with analysts, who argue it is vital that bankers get to run the country's largest banking groups. 

Jacques Badenhorst, an analyst with JP Morgan, said that under Bosman's leadership the bank had "done well" and needed stable management - something he said Booysen would be able to provide.

But Booysen will not have an easy time, as Absa battles to win over investors and improve its return on equity, which is dampened by its lack of exposure in several market sectors.

"Absa is very much a South African-centric bank and is too exposed to the local retail market," said another analyst, who asked not be named.

Despite having 6.3 million customers in the personal, commercial and corporate market segments, the bank trades at a discount to its peers.

This, analysts said, could turn around if it were to better balance its portfolio to hedge against cyclical market trends.

Other challenges Booysen will face include implementing the financial services charter and pushing through internal transformation.

"I intend to apply three basic criteria in evaluating everything we do: reputation, innovation and sound business practice," he told the media and analysts on Friday.

"The charter is more than a scorecard. It is a spirit in which we need to transform our country so that all South Africans can benefit."