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Ramos fights on all fronts

2012-07-16

By: Chris Baron

Source: http://www.businesslive.co.za/southafrica/sa_companies/2012/07/14/ramos-fights-on-all-fronts

Downtown Johannesburg cannot be a happy place right now, with the city's foremost banking figure, Absa boss Maria Ramos, taking stick on all fronts.

Absa chief executive Maria Ramos, who runs the bank with the most customers in South Africa, warned last month that profits had shrunk - sending the company's share price tumbling.

Last week a survey showed her image in the eyes of the public is low relative to other business and political leaders. And the bank's reputation took a further knock over its bungled handling of staff cuts.

Worse still, Absa's parent, Barclays, has been internationally excoriated for dishonest, manipulative behaviour to rig interbank lending rates.

Ramos, the former director-general of Treasury and former CEO of Transnet, was in London on Wednesday for a meeting with the Barclays executive committee.

In an interview with Business Times she said she was "shocked" by the Barclays revelations and had told Barclays chairman Marcus Agius of her concern about the bank's culture.

Agius resigned, but returned when CEO Bob Diamond was effectively forced out by the governor of the Bank of England.

"I told him we need to make sure the culture going forward is one in which fairness, trustworthiness and honesty is exercised all the time."

Did she tell him she was concerned about this?

"I've said it to him many times in the last few days. I think it's obvious."

She said, however, she was not concerned that Absa's image would be contaminated by its close association with Barclays.

"It's important for us to know what we're about. We're about integrity and honesty, trustworthiness and fairness. And I know that Barclays is about that."

Barclays bought 55% of Absa in 2005. Ramos has been on the executive committee of Barclays for two-and-a-half years and said she had in that time "never felt compromised". If she had she would have left.

But the Barclays brand is mud right now, at a time when there is talk about rebranding Absa in its image. This must be a concern for her now, surely?

"We will continue to operate in SA under the Absa brand which is a strong brand in SA," she said.

On the African continent it is a different story.

"Outside SA the Barclays brand is the strong brand. If you go across Africa it is the Barclays brand that dominates and the Barclays brand that people relate to. Our operations outside SA have never operated under the Absa brand."
But even here, if she felt the Absa culture was being compromised, "I would not live with it. I have responsibility for the Barclays Africa operations. We have a great sense across the continent of what our responsibilities are and what our customers expect of us."

Ramos said there is no way Absa will allow a culture detrimental to its values to develop, even under the Barclays brand.

In spite of the cesspit uncovered in London, she painted a glowing picture of integrity which stands in stark contrast to Finance Minister Pravin Gordhan's recent opinion that bankers are "greedy monsters".

She said his comments were "unfair".

"There are tens of thousands of people in banking who work incredibly hard and are passionate about what they do."

Let down by the leaders?

"Yes. Leaders that do not live up to our values are a deep disappointment."

What about the "high and opaque fees" Gordhan accused the banks of?

"We have worked incredibly hard over the last couple of years to create greater transparency, to bring fees down."

What about her own dismal image?

"I am going through a period where I am having to work hard at building my own reputation."

She blames the negative publicity around Absa's restructuring and staff cuts.

"I came into an industry and an organisation where we had to accept a lot of change."

She landed the top job with little previous banking experience to talk of and some have questioned her ability to cope in this most testing of climates for the industry.

Her highly experienced deputy with 32 years' experience, Louis von Zeuner, has announced he will be leaving. She has leaned heavily on him and observers have questioned if she can afford to lose him.

She "tried very hard to keep him", she said, but added that "strong banks don't depend on individuals".

The word is that he left because of Barclays's meddling and micro-management?

"It is not meddling and micromanagement. It's just that Barclays is not a passive shareholder. You wouldn't expect anyone with a controlling interest in any organisation, particularly a bank, to say: 'Here's a big chunk of my capital, and I will see you twice a year.' That is not how it works."

Another four top executives are going.

"There was a lot of duplication," said Ramos.

So the bank was carrying senior, and very expensive, staff who were surplus to requirements?

"Part of a strategy I made known to the market three years ago was an efficiency drive."

The cuts have been blamed on pressure from Barclays. Diamond is said to have demanded of Absa that it "cut the fat".

"He never came down here to tell us to cut the fat," said Ramos.

She and the bank have been battered by reports that it was retrenching 3 000 people. She agreed with the number but said it is made up of "natural attrition" and restructuring. Only 247 people have been retrenched.

She accepted that the communication about this was badly handled by the bank but denied any deliberate obfuscation or deceit.

"Not at all. If we're going to retrench 3000 people I promise you we will say we're retrenching 3 000 people."

She conceded her poor image may be related to her bonuses. There was an outcry when it was announced that she'd be getting a R14-million performance bonus in addition to more than R6-million in regular salary.

The bonus was deferred, she pointed out, while admitting she felt uncomfortable about the numbers.

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