Barclays Ex-Chief Diamond Replaced in Atlas Mara Shakeup

LAGOS (Capital Markets in Africa) – Bob Diamond, the financier who once ran Barclays Plc, is stepping down as executive chairman of his African banking venture as it reviews assets and seeks to exit some countries.

He will be replaced by Michael Wilkerson, the chairman of Fairfax Africa Holdings Corp., which owns 49 percent of the firm, but will stay on as a non-executive director, Atlas Mara said in a statement on Wednesday. Diamond wants to “increase his focus” on other executive roles, including that as chief executive officer of New York-based Atlas Merchant Capital LLC, which has investments in Britain’s Panmure Gordon & Co., Greece’s Praxia Bank SA, France’s Kepler Cheuvreux SA, and U.S. insurer Talcott Resolution Life Inc.

The 67-year-old took the post two years ago on a temporary basis as the firm struggled to contain expenses that were engulfing income. In that time, he helped secure financing from Fairfax Africa and increased Atlas Mara’s stake in its Nigerian banking unit, a cornerstone of its African strategy, to 49 percent from 31 percent.

Atlas Mara will seek to eliminate duplication created by past acquisitions that will result in lower costs, the company said. Dubai will for the time being remain as the company’s corporate headquarters while it shifts key functions and personnel closer to its operations in Africa.

‘Clean House’

“It’s been mismanaged right from the beginning,” said Ronak Gadhia, the director of sub-Saharan African banking research for EFG Hermes in London. “They made wrong acquisitions and have been trying to clean house since day one. A change of strategy was needed.”

Atlas Mara also didn’t have a strong enough franchise in Nigeria, where it was hit by a currency devaluation, and no presence in “African powerhouses like Kenya and Ivory Coast,” he said.

The potential acquisition of Fairfax Africa’s 35 percent stake in financial-services firm GroCapital would give Atlas Mara its first presence in South Africa and allow it to accelerate initiatives in digital banking and agricultural finance. The offshore segment of Atlas Mara’s markets and treasury business will migrate from Dubai, it said.

African Bull
Diamond, an African bull who said in Wednesday’s statement his confidence in Atlas Mara is as “strong” as ever, has been looking for ways to revive confidence in a company that’s shares have tumbled about 80 percent since they started trading. That hindered Atlas Mara’s ability to make acquisitions as slumping commodity prices and volatile currencies weighed on Africa’s economic growth in 2016, spurring the firm to cut costs that nearly matched income.

Some miscalculations were also made along the way as Atlas Mara faced much more experienced hands across in the seven African nations where it operates from the likes of Standard Bank Group Ltd., Standard Chartered Plc and a now-invigorated Absa Group Ltd. It potentially overpaid for some acquisitions, its operations are small and it was also exposed to countries like Zimbabwe, which is going through an economic crisis, Mozambique, which was caught hiding debt from investors, and debt-laden Zambia.

The lender, which also has businesses in Botswana and Rwanda now aims to be among the top five banks in the markets in which it operates, while assessing indications of interest for certain banking assets with Citigroup Inc.

 “Atlas Mara continues to focus on investments in core markets where a path to market leadership is clearly achievable,” the firm said, adding it “will seek to partner, exit or reduce risk exposure elsewhere.”

The securities rose as much as 4.6 percent, the most since April, and were trading 4.2 percent up as of 8:49 a.m. in London, the first gain in four days.

In other changes, Muhammad “Omar” Khan has been appointed as chief financial officer, effective April, while Kenroy Dowers, who served as acting CFO, will continue in his role as managing director for strategy and investments. Two other directors resigned and ex-ABN Amro Bank NV banker Jawaid Mirza will also join from April as a non-executive member.

Source: Bloomberg Business News