Major South African bank buys a slice of Dubai
FirstRand is set to benefit from the acquisition of 20% the JSE-listed Dubai-based giant Optasia, with the bank expanding into digital channels.
Speaking with Business Day TV, Robert Towell from Sasfin Wealth chose FirstRand as his stock pick.
Towell said that all of the banks are offering good investment opportunities, with dividend yields of around 6%.
He added that Sasfin Wealth remains optimistic about FirstRand, despite a slight setback from a regulatory fine from the UK regarding its motor finance business.
Towell said that FirstRand, which owns FNB, RMB, Wesbank, and many more, also has room to grow in the digital banking space.
The company recently acquired a 20% stake in Optasia ahead of the UAE-based company’s listing on the JSE.
Optasia provides fintech services to people across emerging markets, working with prominent companies such as MTN, Vodacom, and Standard Bank, among others.
FirstRand previously said that the investment in Optaisa represents an exciting opportunity to leverage a proven fintech platform that solves the lending needs of underbanked or unbanked clients.
These underbanked or unbanked consumers often struggle to access traditional credit products.
“Optasia’s ability to pre-score customers, process microloans at scale, and use mobile data sales as a credit collection mechanism is highly innovative,” said FirstRand.
“It is clearly meeting the needs of millions of customers in 38 countries across Africa, the Middle East and Asia.”
FirstRand stated that FNB will be able to leverage Optasia to accelerate its own growth strategy in underrepresented markets.
“FirstRand are not going to stand still and let the incumbents take over the banking sector. South Africa is still a place you can invest in, and we like FirstRand at these levels,” said Towell.
FirstRand’s P/E ratio currently stands at around 10.5, with the company having an attractive 5.4% dividend yield
Go straight into Optasia
While FirstRand is set to benefit from its stake in Optasia, South African investors can also benefit from directly investing in the company following its UPO.
Keagan Higgins, Investment Analyst at Anchor Capital, picked Optasia as a stock pick for 2026.
“The Group estimates a potential reach of c. 860 million underserved mobile network members through its telecom rails and data network partners,” said Higgins.
“Only around 120 million are currently active users. That difference signals a significant runway for growth as Optasia deepens penetration within its existing footprint.”
With traditional banks struggling to price and distribute small-ticket credit efficiently, Optasia fills the gap using mobile channels and already has a deep customer dataset.
This dataset allows it to enhance its credit models, a competitive moat that is difficult for new entrants to replicate.
Momentum is strong, with management guiding a 50% revenue growth in FY25, and 25% in FY26, driven by deeper penetration of micro-financing products and geographic expansion.
“FY25E marks a step-change because FY24 reflects a lower comparison base before the platform’s recent scale-up, while 1H25 has already shown accelerating volumes and an improving product mix,” said Higgins.
“The next growth leg should come from deepening penetration across Optasia’s existing footprint, especially in Africa, with Asia remaining an attractive additional runway.”
He noted that South and South-East Asia offer large underbanked populations, high mobile and wallet penetration, and telecoms partners with strong daily engagement.
Although there are risks, like possible regulatory shifts, Higgins said that Optasia’s embedded distribution model and continuously learning credit engine can help mitigate these risks.
A standout feature for Optasia is the valuation disconnect, with the stock trading at a forward P/E ratio of 17, which appears low given management’s medium-term guidance.
“The strategic stake acquired by FirstRand adds a further layer of long-term optionality, both as a validation of the model and a potential future corporate tailwind,” noted Higgins.
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