Is Absa’s new coat of paint enough?
Ululations and the sound of a kudu horn being blown at the JSE made the name and brand change from the Barclays Africa Group to the Absa Group official on Wednesday.
But analysts are not entirely convinced that the rebranding will benefit the group’s ambitions to grow its revenues on the African continent.
After much speculation in the media about the bank’s new brand identity, it unveiled an “African-inspired” look captured by a palette of colours ranging from orange, pink and purple to yellow and burgundy.
“From today, we are officially Absa Group Limited, no longer Barclays Africa Group.
Our new brand and logo are a celebration of our deep sense of pride in our African heritage,” said Absa group chief executive Maria Ramos.
The change comes after Absa’s 14-year-long marriage with Barclays, after the British-based bank bought into Absa in 2005.
Everything from Absa’s new bank cards — which will be rolled out to private banking clients first — to its banking app has been overhauled to reflect its new look.
The rebranding, announced in March, was met with approval on social media: “A super well done to the Absa team … You have wowzer’d us,” said @Kume_dzani on Twitter.
But an analyst says the excitement felt in South Africa about Absa’s new look may not spread to the rest of the continent, after a decade of operating under the well-established Barclays brand.
“I think it is going to be negative on the rest of Africa, because you are changing your brand from something that was trusted, in Barclays, to something that is unknown,” said Jan Meintjes, portfolio manager at Denker Capital. “I think it will take effort from them to convince clients to remain with them.”
Absa has a footprint in 12 African countries and plans to open international offices in the United Kingdom and the United States. Meintjes said that Absa had no choice but to change its name after Barclays decided to sell its 62% stake in 2016.
Ramos told the media at the launch of Absa’s new brand identity on Wednesday that some of the proceeds from the “divorce settlement” — worth about R12‑billion — would be used to rebrand its 1 276 branches in South Africa.
The costs of the rebranding process would not be paid for with extra banking charges levied on its customers, she said.
The renaming and rebranding are not the only changes the bank is making to meet its ambition to double its share of Africa banking revenues and to digitise its offering. Plans include launching WhatsApp banking as a new product offering to be better able to compete with its peers in the digital space.
Ahead of the rebranding, Absa also announced a new executive structure built around four core businesses: retail and business banking; corporate and investment banking; wealth, investment management and insurance; and the rest of Africa. Each unit will be headed by its own chief executive.
“The changes we have made are changes we have been very clear about in our restructuring and that have been designed for efficiency and for us to compete. And they are very much designed for us to regain a market share,” Ramos said.
Meintjes said the highly competitive and contested banking sector would make it hard for the newly branded bank to make its mark. No bank had a “silver bullet” for meeting consumers’ digital needs, he said, as they were all playing in the same digital space to enhance their services.
“Having a new brand and playing around with WhatsApp strategies is not going to change [Absa’s] fundamental product offering, and help regain market share losses for them,” Meintjes added.
For Absa to grow its market share and establish a digital space presence, Meintjes said it needed to prove it can compete effectively with the likes of Capitec and FNB.
In digital banking in South Africa, FNB takes the top spot followed by Capitec, according to the latest annual SITEisfaction report by insights agency Columinate.
The survey found that Absa was placed last among its competitors in internet, mobile and digital banking services.
Thulebona Mhlanga is an Adamela Trust financial reporter at the Mail & Guardian