The four banks that merged to create South Africa’s R170 billion giant

Absa is one of the largest financial service providers in South Africa, and its roots come from the formation of four banks in the 1980s.

Absa is currently one of South Africa’s ‘Big Four’ banks, alongside Standard Bank, FNB and Nedbank, and has a market cap of R170 billion.

Its roots date back to the 1990s, when four banks merged together – Allied Bank, United Building Society (UBS) and TrustBank. Certain interests of the Sage Group were also in the merger.

The merger of the four banks created the Amalgamated Banks of South Africa (Absa). The four banks varied in their history and share in the South African market.

UBS, not to be confused with the current Swiss-based Bank, was the largest building society in South Africa.

Allied Bank was a large building society, while TrustBank and Volkskas were two of the largest commercial banks in the country.

Volkskas history was notably tied to the history of the apartheid-era South Africa and was seen as a vehicle to drive Afrikaner economic power.

The bank, initially formed as a cooperative bank in the 1930s, would become a commercial bank in the 1940s. It grew rapidly from there with support from the National Party.

It would become extremely focused on industrial and other enterprises by the 1960s, with more that half of its profits coming from the sector in the 1980s.

In 1991, the issuer was formed when the holding companies UBS, Allied Bank and Volkskas merged together.

In 1992, all the assets and liabilities of Bankorp Holdings Limited (formerly known as Die Trustbank van Afrika) were taken over by Absa Bank Limited in an acquisition.

Bankorp also included the shareholding of Senbank, a merchant bank and Bankfin, a specialist instalment finance bank.

In 1997, the name of the holding company was changed to Absa Group Ltd. A year later, UBS, Volkskas, Allied and TrustBank were merged into a single brand, with Absa adopting a new corporate identity.

In 1998, the United, Volkskas, Allied and TrustBank brands were consolidated into a single brand, and Absa adopted a new corporate identity.

Following a few years of market share growth in retail and corporate banking, British banking Giant Barclay’s acquired a majority stake in the bank.

The deal helped the ‘Big Four’ bank expand their international footprint and access international banking expertise.

However, by 2018, Barclays had massively reduced its shareholding in the bank, and it was rebranded back to Absa. By 2022, Barclays sold the last 7% of its shareholding in the bank.

Absa today

Despite its already unique history, Absa’s recent years have been characterised by several leadership changes.

After roughly ten years at the helm, Maria Ramos left the bank in 2019. The former National Treasury Director-General and Transnet CEO’s departure led to a series of permanent and interim CEOs.

Following her departure, René van Wyk took over on an interim basis until January 2020. Daniel Mminele left his role as a Deputy Governor of the Reserve Bank to become permanent CEO.

However, Mminele would leave the role a year after joining, following disagreements with the bank over its strategic direction.

Finance Director Jason Quinn took over on an interim basis from April 2021 to March 2022.

Jason Quinn then took on the role on an interim basis until early 2022, when Arrie Rautenbach, the previous head of the bank group’s retail and business banking unit, took complete control.

However, Rautenbach’s leadership failed to see the bank see any major growth, with its headline earnings dropping by 5% to 1,228.4 cents per share in the first six months of 2024.

Due to the poor results, Rautenbach entered gardening leave in October 2024 and will enter early retirement in April of this year.

Charles Russon took over as interim CEO in October, becoming the sixth CEO, interim or permanent, in as many years. Russon previously served as the CEO of Absa’s Corporate and Investment Bank.

• Maria Ramos – March 2009 to February 2009

• René van Wyk – March 2019 to January 2020

• Daniel Mminele – January 2020 to April 2021

• Jason Quinn – April 2021 to March 2022

• Arrie Rautenbach – March 2022 to October 2024

• Charles Russon – October 2024 onward

The bank is currently searching for a full-time replacement for Rautenbach. Its results for 2024 are coming out tomorrow, 11 March, with many looking to see if it can exit this tumultuous period.