Good news for South Africa’s zero-fee bank
Bank Zero is projected to reach break-even status at the standalone level in December 2026. By the time it breaks even, customer deposits are expected to reach R1 billion.
This milestone has been a long time in the making for the zero-fee bank, which obtained its banking license in 2018 and is currently being acquired by the South African fintech company Lesaka.
The acquisition is not yet finalised, as there are still some regulatory hurdles to overcome, including approval from the Prudential Authority and exchange control approval from the Reserve Bank.
Lesaka announced in its fourth-quarter FY2026 results presentation that it expects the transaction to become unconditional in December 2026.
Lesaka is a US-based firm that offers financial technology products and services to underserved consumers and small businesses.
The company also provides affordable financial services to unbanked and underserved customers, including microloans, insurance, transaction switching, and payment processing.
The record for the fastest break-even status belongs to TymeBank, which achieved this milestone in four years and ten months.
Daily Investor reported that Discovery Bank took seven years from its initial setup in 2019 to reach full-year break-even status and reported its first operating profit in the financial year ending June 2026.
As a result, Bank Zero, which launched to the public in August 2021, is expected to take just over five years to reach break-even status.
This is faster than Discovery Bank, though slightly behind TymeBank’s record of 4 years and 10 months.
Bank Zero provides a bank account with no monthly subscription fee and lower transaction costs than conventional accounts.
Bank Zero operates independently of traditional banking structures, avoiding the need for head offices, numerous branches, and a large staff.
The bank was founded by former FNB executives Michael Jordaan and Yatin Narsai in 2018 and officially launched to the public in 2021. It was initially projected to break even within two years of its launch.
Its founders anticipated that the company would benefit from a smaller customer base and reduced risk.
The acquisition of Lesaka was first announced in June 2025, at which point Bank Zero had a deposit base of R400 million.
In November 2025, the parties received unconditional approval from the Competition Tribunal for the acquisition.
By April 2026, Bank Zero began onboarding its first alliance banking partner, Paymentology, and its deposit base had increased to R700 million.
Delays in the sale
In July 2025, Lesaka announced a deal to acquire Bank Zero for about R1.1 billion.
The transaction includes up to R91 million in cash, with the remainder being financed through a series of newly issued Lesaka shares.
Following the completion of the deal, Bank Zero’s shareholders will own about 12% of Lesaka’s fully diluted shares.
As part of the agreement, Jordaan will join Lesaka’s board, while Narsai will continue as the CEO of Bank Zero.
The Competition Tribunal approved the deal in late 2025, allowing Lesaka to take direct control of Zero Research, the parent company of Bank Zero. However, certain regulatory approvals are still pending.
The parties agreed to extend the deadline, or “long-stop date,” from August 6, 2026, to January 31, 2027, to secure the remaining outstanding regulatory consents.
The long-stop date is the date by which all conditions of the acquisition deal must be satisfied or waived.
During the group’s third-quarter results presentation for the 2026 financial year, Lesaka Technologies Executive Chairman Ali Mazanderani highlighted the multiple benefits of acquiring Bank Zero.
He noted that Bank Zero has historically focused on serving small and medium-sized enterprises (SMEs) as a digital banking provider.
With this acquisition, Lesaka will be able to offer banking products through its existing sales teams and relationships, which should enhance Average Revenue Per User (ARPU).
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