Banking

South Africa’s newest bank gets a multi-billion rand head start

Luke Fraser

 ·10 Sep 2025

Old Mutual’s new bank has benefited from the group’s existing operations, with billions in deposits and lending already on the books.

Following a soft launch earlier this year, OM Bank officially opened to the public last month, with Money Account clients requested to download the OM Bank app.

In its latest financial results for the year’s first half, Old Mutual said that it is leveraging its existing banking capabilities for OM Bank. 

This includes R1.5 billion in deposits and R15.5 billion in lending operations. 

Despite being digital-first, Old Mutual uses its 346 branch network and FAIS-accredited in-branch advisor force to help grow the bank. 

“This allows us to expand current relationships with our mass-market customers while attracting new customers through a compelling banking proposition.” 

With a focus on the mass market, OM Bank is set to compete with banking giant Capitec, which has close to 25 million customers. 

Old Mutual has spent around R3.0 billion since 2022 in building its bank and secured a banking licence in early 2024. 

The group previously said that the bank is expected to post an annual loss rate of R1.1 billion and R1.3 billion, before becoming profitable in 2028. 

Clarence Nethengwe was appointed OM Bank CEO, previously serving as the group’s Managing Director of the group’s Mass and Foundation Cluster.

Nomkhita Nqweni was also named the inaugural chairperson of the bank, having previously served on the Old Mutual board.

Financials 

When looking at the group’s financials, results from operations increased by 16%, primarily driven by growth in Old Mutual Insure and favourable market conditions.

This growth was offset by the negative impact of a persistency basis change in Mass and Foundation Cluster and higher central costs. 

This includes a once-off restructuring provision incurred to reduce future expenditure.

The group’s adjusted headline earnings stood at R4.2 billion, boosting return on net asset value to 15.5% amid sales and persistency pressures. 

The group’s adjusted headline earnings growth of 29% was driven by strong underwriting performance in Old Mutual Insure and strong equity market performance, especially in South Africa and Malawi.

The board declared an interim dividend of 37 cents per share, reflecting a 9% increase. 

Its strong cash generation has also enabled a R3 billion share buyback. However, the group noted that IFRS profit and headline earnings declined. 

This mainly reflected reduced profits from the Zimbabwean business after the transition of its functional currency from Zimbabwe Gold to the United States dollar.

With this, basic earnings declined by 20% to 96.1 cents per share, while headline earnings dropped by 27% to 97.5 cents per share.