South Africa’s new bank gets ready to launch

Old Mutual’s investment in its new bank, OM Bank, has impacted its results for 2024, but the group still expects a massive jump in headline earnings.

In a trading statement related to FY2024, Old Mutual said that its headline earnings are expected to increase between 10% and 30% to a range of R8.1 billion and R9.5 billion.

The group said its share repurchase programme boosted headline and basic earnings per share.

Strong performances in Old Mutual Insure, Wealth Management and Old Mutual Investments also drove solid results.

However, lower profits in Personal Finance and the group’s investment in OM Bank partially offset this.

OM Bank is set for a soft launch in Q2 of 2025 and a wider public launch in Q3. The bank will compete in the retail mass market, which is currently dominated by Capitec.

The bank, which can’t have Old Mutual’s name due to regulations, will offer transactional banking and a credit offering, with the group leveraging its existing business to cross-sell OM Bank products.

The bank’s leadership team was announced last week, with Nomkhita Nqweni as chair and Clarence Nethengwe as CEO.

Looking at its financials, the group’s adjusted headline earnings growth was bolstered by increased shareholder investment returns, with a 7% to 27% increase expected.

In the previous year, headline earnings included once-off heading losses arising from the IFRS 17 transition, which were excluded from adjusted headline earnings.

The group added that the movement between after-tax profit and headline earnings was driven by the loss recognised on the disposal of subsidiaries from exited countries.

It was also affected by an impairment in an investment in an associate. This was the main contributor to the growth in headline earnings relative IFRS profit after tax attributable to equity holders of the parent.