{"id":817388,"date":"2025-03-18T08:46:30","date_gmt":"2025-03-18T06:46:30","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=817388"},"modified":"2025-05-30T09:55:16","modified_gmt":"2025-05-30T07:55:16","slug":"new-r2-8-billion-bank-launching-in-south-africa-this-year","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/817388\/new-r2-8-billion-bank-launching-in-south-africa-this-year\/","title":{"rendered":"New R2.8 billion bank launching in South Africa this year"},"content":{"rendered":"\n

Old Mutual is making significant progress on its upcoming bank but expects the new entity to record a startup loss of over R1 billion.<\/p>\n\n\n\n

OM Bank, which will not carry the Old Mutual name due to regulations, recently appointed Clarence Nethengwe as CEO. He was previously in charge of the Mass and Foundation Cluster.<\/p>\n\n\n\n

The bank’s board of directors was recently appointed, with Nomkhita Nqweni as the inaugural chairperson. It received its banking license from the Prudential Authority in March 2024.<\/p>\n\n\n\n

Old Mutual said the bank’s national rollout will now occur in Q4 2025, a slight delay from previous announcements. <\/p>\n\n\n\n

Management and the board will oversee a gradual customer acquisition strategy.<\/p>\n\n\n\n

Between 2022 and 2024, Old Mutual spent a cumulative R2.8 billion to build the bank and secure a deposit-taking retail banking license.<\/p>\n\n\n\n

The group anticipates an initial loss run rate of R1.1 billion to R1.3 billion. This will reduce over time, with the bank expected to break even in 2028.<\/strong><\/p>\n\n\n\n

“The launch of OM Bank in South Africa is a material catalyst to our strategic delivery journey and a concrete realisation of our strategic ambition to build an integrated financial services business.” <\/p>\n\n\n\n

“Our next key milestones include a phased approach to customer acquisition, integrating the Old Mutual Rewards Programme and positioning OM Bank to reach breakeven in the medium term.”<\/p>\n\n\n\n

“OM Bank is designed to deliver tangible value for our customers and to position us for long-term competitive advantage in an intensely competitive market,” said group CEO Iain Williamson. <\/p>\n\n\n\n

The new bank will operate in the retail mass market, taking on juggernaut Capitec, which has over 20 million customers. <\/p>\n\n\n\n

“By leveraging our existing customer base, a highly trusted brand and our expansive distribution network, we are uniquely positioned to deliver a digital-first bank at scale to the market.”

“Our cloud-based platform offers a seamless, scalable single-facility account with debit, credit, overdraft and savings facilities, empowering customers with greater financial control while lowering cost to serve.”<\/p>\n\n\n\n

Financials<\/strong><\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

In the group’s financial results for 2024, Williamson said that the GNU’s formation, early momentum in the macroeconomic environment and improved load shedding boosted investor confidence. <\/p>\n\n\n\n

Low inflation, strong equity markets, and a strengthened rand portrayed positive signs of economic recovery in the second half of 2024.<\/p>\n\n\n\n

However, market sentiment did not translate into a broader recovery in consumer confidence. Household debt to disposable income remained high at 62.2%, and high investment rates hurt its retail businesses.<\/p>\n\n\n\n

Although gross flow growth was strong, net client cash outflow of R21.5 billion was impacted by significant outflows in Old Mutual Africa Regions and Old Mutual Corporate. <\/p>\n\n\n\n

Old Mutual Africa Regions saw higher outflows due to a loss of a single mandate. Old Mutual Corporate’s outflows included elevated terminations due to the unprofitable business on an investment platform and a large client termination. <\/p>\n\n\n\n

Higher benefits payments were due to retirement and retrenchment benefits and two-pot withdrawals. Two-pot withdrawals amounted to R3.4 billion across the group. <\/p>\n\n\n\n

Nevertheless, funds under management grew by 10% to R1.5 trillion, reflecting strong performances in equities and money market assets, mainly in South Africa, Malawi and Kenya.<\/p>\n\n\n\n

“Our financial performance in 2024 reflects our strategic focus on profitable organic growth in the core, disciplined capital allocation in new growth engines and investments in operational efficiencies.”<\/p>\n\n\n\n

“We delivered good growth of 14% in adjusted headline earnings, and adjusted headline earnings per share increased by 17%,” said the CEO.<\/p>\n\n\n\n

Old Mutual’s board declared a final dividend of 52 cents per share, with the total dividend for 2024 growing by 6% to 86 cents per share. <\/p>\n\n\n\n

Financials<\/strong><\/td>2023<\/strong><\/td>2024<\/strong><\/td>% Change<\/strong><\/td><\/tr>
Results from operations (Rm)<\/td>8 343<\/td>8 709<\/td>+4%<\/td><\/tr>
Headline earnings (Rm)*<\/td>7 380<\/td>8 826<\/td>+20%<\/td><\/tr>
Adjusted headline earnings (Rm)<\/td>5 861<\/td>6 685<\/td>+14%<\/td><\/tr>
Basic earnings per share (Cents)*<\/td>158.4<\/td>176.2<\/td>+11%<\/td><\/tr>
Headline earnings per share (Cents)*<\/td>165.5<\/td>202.7<\/td>+22%<\/td><\/tr>
Total Dividend (Cents)<\/td>81<\/td>86<\/td>+6%<\/td><\/tr><\/tbody><\/table><\/div>
*Include Results from Zimbabwe. <\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Old Mutual’s new bank will see a national roll-out in Q4 2025, but the bank is expected to only breakeven in 2028. <\/p>\n","protected":false},"author":95,"featured_media":769180,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1110,20634],"class_list":["post-817388","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-old-mutual","tag-om-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=817388"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817388\/revisions"}],"predecessor-version":[{"id":826186,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817388\/revisions\/826186"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/769180"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=817388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=817388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=817388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}