Background of African Bank Investments Limited’s (ABIL) African bank CEO resigns with immediate effect
African Bank Investments Limited (ABIL), the JSE-listed provider of unsecured loans, on Wednesday said one of its founders and CEO, Leon Kirkinis, had resigned with immediate effect after 23 years in the business.
The share price of ABIL sagged almost 57 percent on the JSE’s morning trade on the news, signalling that the market did not like the news.
The market worry could have been prompted by the fact that Kirkinis, who has served the company for many years, resigned with immediate effect.
This comes at a time when the company is struggling to produce top-line earnings growth as it continues to face tough trading conditions in a negative economic environment in South Africa. “The board owes a huge debt of gratitude to Leon for his vision and leadership during the growth of African Bank and wishes him every success for the future,” the board said.
Nithia Nalliah, the current group CFO, will replace Kirkinis as acting CEO of ABIL and MD of African Bank, a unit of ABIL, with immediate effect.
Nalliah joined ABIL in 2006 as CFO and the board said it was confident, that he has a good track record and is competent enough to drive ABIL through these “trying times” while awaiting the appointment of a full-time CEO and MD.
He will continue to occupy the position of the Group CFO up until other appointments are made. On Wednesday, ABIL released a trading update which showed that it is not raining but pouring for South Africa’s biggest provider of unsecured loans.
ABIL said the banking unit is likely to post a basic loss and headline loss for the second half of the 2014 financial year.
The banking unit forecasts a basic and headline loss of at least R4.6 billion ($427 million) for the full year compared to the basic loss and headline earnings in the 2013 the financial year 2013 of R3 264 million ($297 million) and R654 million ($60.7 million).
Sourced: Jacks, M. 2014. African bank CEO resigns with immediate effect. Ventures. [website]. Retrieved from https://venturesafrica.com/african-bank-ceo-resigns-with-immediate-effect/. [Accessed 19 September 2022].
Question [20 Marks]
The small banking industry within South Africa remains very competitive and does not make it easy for small banks, such as African Bank Investments Limited’s (ABIL) ability to dominate the banking industry.
With reference to the two sources given below and any other relevant sources, answer the following question in essay format.
During Mr Leon Kirkinis’ tenure as CEO of the Bank, provide your opinion of whether you would regard Mr Kirkinis as a responsible strategic leader. To reach your decision, you are required to:
• Introduce the essay by defining the term “responsible strategic leader”.
• In the body of the essay discuss the responsibilities that Mr Kirkinis had towards the relevant stakeholders and whether these responsibilities were met.
• Conclude the essay by giving your views on how Mr Kirkinis and ABIL’s strategic leadership panned out.
• Substantiate your answer by referencing examples from the case studies or any other academically relevant sources.
Business Management Assignment Answers by Experts
Answer 1: A strategic leader is one that is highly effective in taking strategic decisions by way of combining strategic thinking for the overall benefit of all the stakeholders. Strategic decisions are therefore undertaken by a strategic leader with the objective of enhancing the value for each and every stakeholder associated with it. In the given case of Mr Leon Kirkins, he has been the CEO of African Bank Investment Limited and it is important to evaluate different aspects of his working in order to identify whether Mr Kirkinis is a responsible strategic leader.
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