Standard Bank Tightens Grip on Liberty After Row With CEO

JOHANNESBURG (Capital Markets in Africa) – History is repeating itself at the insurer controlled by Africa’s largest bank by assets.

Standard Bank Group Limited on Tuesday announced that its head of investment banking will take over as chief executive officer of Liberty Holdings Limited in an effort to end the drag that the Johannesburg-based insurer is having on profit. The deployment of David Munro to the post comes after the abrupt departure of Thabo Dloti following a bust-up with his company’s board, at least four of whom are from Standard Bank.

“Thabo was resolute to turn things around, so it’s a surprising turn of events,” said Patrice Rassou, head of equities at Sanlam Investment Management in Cape Town. Dloti quit over differences between his strategy and priorities for the insurer as opposed to the views of the board, Standard Bank and Liberty said in separate statements.

In the past, Liberty has been headed by Myles Ruck, who was an investment banker like Munro, and Bruce Hemphill, who at one stage headed the lender’s corporate and merchant-banking business before moving to Liberty and eventually to London-based Old Mutual Plc, where he is now CEO.

Under Ruck, who held the post from 2003 until 2006, Liberty’s shares rose more than 40 percent. With Hemphill, who took over in the midst of the global financial crisis, it more than doubled. Dloti presided over a 12 percent decline in the stock since he started in the position in April, 2014. The slide steepened after the insurer reported a 45 percent plunge in its 2016 earnings.

Dloti, who joined Liberty’s money management unit Stanlib seven years ago from Old Mutual, said he will be on leave for three months, but declined to comment further when contacted by mobile phone on Tuesday. 

Shares Rally
The insurer’s stock gained 3.4 percent to close at 114.50 rand in Johannesburg, its highest in more than two months. Standard Bank was little changed at 152.06 rand.

Liberty, 54 percent-owned by Standard Bank, now boasts a CEO, a chairman and a financial director who have all come from the lender. Former Standard Bank CEO Jacko Maree became chairman of the board in January, 2015, while Liberty’s financial director, Casper Troskie, was chief financial officer at the lender before taking his current post in 2010.

Munro will be replaced at Standard Bank by Kenny Fihla, currently deputy CEO of the investment bank, Standard Bank said.

“The selection of David Munro as CEO is a very good appointment as he has an excellent track record at Standard Bank and is a very experienced executive in financial services,” said Adrian Cloete, banks analyst at PSG Wealth in Cape Town. “Munro has been key in turning around the corporate and investment-banking operations, increasing CIB’s return on equity to within the target range and largely resolving the drag that Standard Bank’s London operation had on the group.”