Bob Diamond. Picture: REUTERS
Bob Diamond. Picture: REUTERS

Bob Diamond, the financier who once ran Barclays, is stepping down as executive chair of his African banking venture Atlas Mara as it reviews assets and seeks to exit some countries.

He will be replaced by Michael Wilkerson, chair of Fairfax Africa Holdings, which owns 49% of the  company, but will stay on as a non-executive director, Atlas Mara said on Wednesday.

Diamond wants to “increase his focus” on other executive roles, including that as CEO of New York-based Atlas Merchant Capital, which has investments in Britain’s Panmure Gordon & Co, Greece’s Praxia Bank, France’s Kepler Cheuvreux, and US insurer Talcott Resolution Life.

The 67-year-old took the post two years ago on a temporary basis as the  company 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% from 31%.

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.

“It’s been mismanaged right from the beginning,” said Ronak Gadhia, 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 did  not 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% stake in financial-services  company GroCapital  will give Atlas Mara its first presence in SA 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.

Diamond, an African bull who said his confidence in Atlas Mara has remained “strong”, has been looking for ways to revive confidence in a company  whose shares have tumbled about 80% 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  company to cut costs that nearly matched income.

Some miscalculations were also made along the way as Atlas Mara faced much more experienced hands across the seven African nations where it operates from the likes of Standard Bank Group, Standard Chartered and a now-invigorated Absa Group. It potentially overpaid for some acquisitions, its operations are small and it was also exposed to countries  such as 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.

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

The securities rose as much as 4.6%, the most since April, and were trading 4.2% up  in mid morning trading in London, the first gain in four days.

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