The Absa Group, formerly Barclays Africa, on Wednesday admitted to making mistakes in its retail banking business (RBB) that saw it lose market share. The admission came as the group rebranded its identity following its separation from Barclays plc, with Absa now aiming to unleash its digital strategy as it goes full throttle to claw back lost ground.
Absa to claw back lost ground
Absa chief executive Maria Ramos said the group’s loss of its previously dominant market position was due to numerous factors, but that the new strategy would ensure it made the right investments.
“We were the biggest player in the mortgage market. We had mortgages sitting in our books worth a 100 percent or more loan-to-value and eventually we had to clean up that mortgage book,” Ramos said. “When we came out of cleaning that mortgage book we made some decisions that in hindsight were not the right decisions and cost us market share. It took too long to get the rhythm back in the mortgage business.”
Featured in the article was Aeon Investment Management chief investment officer Asief Mohamed who said the return on equity metrics of the big four banks over the past couple of years indicated that Absa had lagged the other three big banks. Asief was quoted, “Capitec has taken market share from the big four banks over many years. The long-awaited Discovery Bank is expected to be a formidable competitor for all the banks in South Africa. Absa will find it difficult to be a digitally led bank,”