(Bloomberg) -- Standard Bank Group Ltd. appointed Sim Tshabalala as sole chief executive officer, ending a dual role he shared with Ben Kruger, and making him the first black person to lead Africa’s largest lender independently.
Kruger, 58, will step down as joint-CEO immediately and continue as an executive director, reporting to Tshabalala, 49, Johannesburg-based Standard Bank said in a statement on Tuesday. The joint leadership structure was necessary as part of the company’s management succession plan when it was introduced in March 2013, the lender said.
Tshabalala becomes the only black person to lead one of South Africa’s biggest banks since Sizwe Nxasana retired as the head of FirstRand Ltd., the second-largest by assets, in March 2015. President Jacob Zuma has criticized lenders, including Barclays Africa Group Ltd., for doing too little to boost black participation in their companies since apartheid ended in 1994. In the past decade, all but Nedbank Group Ltd.’s board regressed on racial diversity.
“Along with the work that is currently ongoing in parliament to address the slow pace of transformation in the financial sector, Tshabalala’s appointment comes as a step in the right direction,” Finance Minister Malusi Gigaba said in an emailed statement. As one of the leaders of the four biggest banks “this is truly an affirmation of the capacity of black professionals,” he said.
Standard Bank was little changed at 162.93 rand as of 4:06 p.m. in Johannesburg. The share has gained 7.4 percent this year, making it the best-performing lender after Capitec Bank Holdings Ltd. The stock has climbed about 40 percent since Tshabalala and Kruger took over, lagging an almost 47 percent increase in the six-member FTSE/JSE Africa Banks Index.
“The joint CEO structure worked very well,” said Adrian Cloete, banks analyst at PSG Wealth in Cape Town. “Most shareholders are usually comfortable with a single CEO, but I don’t think that this should be cast in stone. As the senior executives at Standard Bank have been together a long time and have a great working relationship, I don’t expect any major changes in strategy.”
In his new role, Kruger will contribute toward the governance of the group and the African region, provide guidance over the “continued digitization of the group” and deepen Standard Bank’s relationship with its strategic partner and 20 percent shareholder, Industrial & Commercial Bank of China Ltd., the company said.
Kruger was seen as the older, more experienced counterpart and the big issue in 2013 was restructuring and scaling back Standard Bank’s international footprint, including its London offices and other developing countries, Patrice Rassou, head of equities for Sanlam Investment Management in Cape Town, said. Standard Bank sold off units in Argentina, Russia, Turkey and the U.K. to focus on its operations in Africa.
With that done, “the new strategy is well set, focusing on Africa rather than emerging markets,” Rassou said. “Sim used to run the Africa division 10 years ago, so is well qualified for this.”