Four new banks coming to South Africa

South Africa’s large and respected banks will face more competition from several new banks that are planning to launch.

South Africa’s banking space has been dominated by the “Big Four” – Standard Bank, Nedbank, Absa, and FNB.

These banks offer customers retail, corporate, and investment banking services and earn billions in profits yearly.

However, new competitors, including retail mass-market player Capitec, have tried to take power away from the top four.

Capitec now has the most customers of any bank in South Africa, with 23 million customers joining the bank. This is a massive achievement considering it only launched at the start of the century.

Another recent shift has seen the opening of several digital banks that do not have any branches and conduct the vast majority of their interactions with clients online.

This includes Tymebank, which recently reached 10 million customers; Discovery Bank, which utilises the group’s Vitality rewards program; and Bank Zero, which aims to cut bank fees.

Despite being one of the most advanced and well-regulated banking sectors in emerging markets, the banking industry still faces many headwinds.

This includes weak economic growth in South Africa, regulatory changes, poor financial inclusion, and lower-income South Africans’ education.

Challenges include economic volatility, regulatory changes, and financial inclusion efforts to expand banking access to underserved communities.

Nevertheless, several private and state institutions plan to open new banks in South Africa shortly, with OM Bank, Postbank, YWBN Mutual Bank and SAIFSC in the works.

OM Bank

The only bank with a known launch time frame is OM Bank. The Old Mutual-run bank will have a soft launch in Q2 of 2025 and a wider public launch in Q4.

The bank, which can’t have Old Mutual’s name due to regulations, will target the retail mass market dominated by Capitec. It will offer transactional banking and credit products.

The new bank will be digital-first, which it believes will add greater convenience to customers in the country.

Although it will be a digital-first bank, Old Mutual will use its existing branch networks to broaden its customer branding experience.

The bank’s leadership will include Nomkhita Nqweni as chair and Clarence Nethengwe as CEO. The latter formerly headed the Mass and Foundation Cluster.

Postbank

The state is also looking to launch an official bank via the Postbank, which will focus on expanding services to rural and lower-income communities.

Despite already offering some financial services, Postbank was strictly a savings subsidiary. The signing of the passed Postbank Amendment Bill will greatly expand the bank’s offerings.

The Bill, signed by President Cyril Ramaphosa in September 2023, transferred the bank’s shareholding from the struggling South African Post Office to the government.

This allowed for the creation of a bank-controlling company, Postbank SoC Limited, allowing Postpank to become a fully-fledged state-owned bank.

Minister of Communications and Digital Technologies Solly Malatsi recently invited nominations for the inaugural board of Postbank SoC Limited. Applications closed in mid-February 2025.

YWBN Mutual Bank

The Young Women in Business Network (YWBN) was registered in January 2024 and is the first women-owned bank in South Africa.

After receiving its approval from the Prudential Authority, the bank said that it would spend 2024 focusing on its bank build, with a launch scheduled for 2025 or later.

Opened in 2018, YWBN operated as a cooperative financial institution (CFI), which can only offer services to its members. It will convert from a CFI to a fully fledged mutual bank.

Unlike commercial banks, Mutual Banks are owned by their depositors, who become shareholders and make decisions during general meetings.

Despite still not launching, our sister publication, Daily Investor, reported that the bank is already undergoing a name change to Nthabeleng Likotsi Mutual Bank.

The change will be named after its founder, Nthabeleng Likotsi and is subject to approval from the Prudential Authority. 

SAIFSC

The Department of Women, Youth and Persons with Disabilities (the DWYPD) has also announced plans to open a new cooperative bank in South Africa. 

The new bank is set to be called the South Africa Innovative Financial Services Cooperative (SAIFSC). However, due to regulatory issues, the bank missed the proposed launch in July 2024.

Prudential Authority and the Financial Sector Conduct Authority (FSCA) asked the bank to provide additional documents to finalise the application to become a cooperative bank in August 2024.

The department’s latest implementation plan indicates that the bank could launch in 2025, subject to regulatory approvals.

At the end of the last financial year, the bank had just over 450 members and a balance of R279,000. It hopes to expand these figures by recruiting more customers.