Investor’s Notebook: A very different Absa branch
At the Mall of Africa last week I had to wear shades as I stepped into the banking hall. Standing out from the dull pastel colours was a fake gold sign saying, of all things, “Absa”. The colour scheme and design of the branch had more in common with a Virgin Atlantic lounge than any of the more humdrum branches in the Absa stable.
This initiative is the brainchild of a very different Absa retail team, headed by Craig Bond. The head of retail channels, Marius de la Rey, was the founder of King Pie (no, not King Price Insurance, which is often known by that name — the real King Pie in all its calorific glory). He was later MD of Mugg & Bean. So he doesn’t see a branch in the same way as your typical pin-stripe bankers do. He hired some tattooed designers to design a branch, and they brought in plenty of yellow and purple. If they had planned to include Barclays blue, all the relevant items had been discreetly removed before the branch opened at the end of April.
De la Rey says that however much people talk about the death of the branch, it is the experience of retail globally that maintaining physical presence is key to any retail strategy. Back in the dark ages of the early Internet this strategy was known as “clicks and mortar”. Even online businesses such as Amazon, eyeglass site Warby Parker and cosmetics giant Birchbox are opening stores enthusiastically, Absa tells me.
What the bank is hoping for is a (wait for it) step change in customer engagement and experience. Absa used a slew of techniques, such as virtual reality, 3D printed modules, animations and augmented reality so staff and customers could experience the environment before it was built. If I go back again in two or three months’ time it could look quite different. I hope they won’t remove the foosball table and arcade machine, which includes retro classics such as Pacman and Space Invaders, beloved by us baby boomers.
I was also impressed by the queue benches in the tellers’ section. This is quite unashamedly the heart of branch — and quite different from First National Bank (FNB), which seems embarrassed that some of its clients might need tellers and tucks that section behind a wall somewhere. And Absa has not built private offices at Mall of Africa but put them on casters so it can change their number and position very easily.
There was certainly more imagination than any other branch in the mall. FNB, Standard and Nedbank were all staggeringly bland, with industrialised colour schemes.
• I will resist the temptation to refer to Rajay and Pallavi Ambekar as a power couple. They certainly have different views on employment.
Pallavi Ambekar has been building up a double act at Coronation for many years with Neville Chester, which regularly sells out venues. Rajay Ambekar has worked at a number of shops, such as African Harvest, Cadiz, Prudential and Investec. He is now setting up his own shop, Excelsio, and has recruited three experienced analysts and a COO. He insists that it will not be a one-man show, though most clients will be buying his Bollywood-style charisma.
More seriously, Ambekar will be offering both a core and aggressive fund. He has experience of both relative-value investing, at African Harvest and Prudential, and deep-value investing at Investec Value. He says that most people do not appreciate the lumpiness of the outperformance of deep value, which can underperform for years at a time. But those who can tolerate underperformance will do well from deep value in the very long term.