{"id":834347,"date":"2025-08-09T16:00:00","date_gmt":"2025-08-09T14:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=834347"},"modified":"2025-08-08T16:19:09","modified_gmt":"2025-08-08T14:19:09","slug":"the-south-african-giant-that-sold-a-bank-then-spent-r3-billion-to-launch-a-new-one","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/834347\/the-south-african-giant-that-sold-a-bank-then-spent-r3-billion-to-launch-a-new-one\/","title":{"rendered":"The South African giant that sold a bank – then spent R3 billion to launch a new one"},"content":{"rendered":"\n

Old Mutual will soon launch a new bank in South Africa despite having a majority shareholding in one of South Africa\u2019s largest banks, Nedbank, a decade ago. <\/p>\n\n\n\n

OM Bank, which will not carry the Old Mutual name due to regulatory matters, is expected to see a national rollout in Q4 2025 following several delays. <\/p>\n\n\n\n

The bank will operate in the Mass Market cluster, taking on Capitec, African Bank and Tyme Bank. Old Mutual already competes with these players via its micro loan business. <\/p>\n\n\n\n

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

The group said it anticipates an initial loss run rate of R1.1 billion to R1.3 billion, which will reduce as the bank is expected to break even in 2028.<\/p>\n\n\n\n

The new bank will be under the leadership of Clarence Nethengwe as CEO. He was previously in charge of the group\u2019s Mass and Foundation Cluster. <\/p>\n\n\n\n

The bank\u2019s board of directors was also recently appointed, with Nomkhita Nqweni acting as the inaugural chairperson. <\/p>\n\n\n\n

The group plans to leverage its existing customer base, trusted brand and expansive distribution network to grow the bank. <\/p>\n\n\n\n

Its cloud-based service is also set to offer a scalable single-facility account with debit, credit, overdraft, and savings facilities at lower costs. <\/p>\n\n\n\n

Mark du Toit from OysterCatcher Investments<\/a> said there is value to be found in the Old Mutual Group, and that turning OM Bank from a loss-making entity into a profitable one will help the group\u2019s growth.<\/p>\n\n\n\n

Already owned a bank <\/h2>\n\n\n
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Despite now working on creating a new bank, Old Mutual was previously the majority shareholder of Nedbank after acquiring 53% of the group in 1986.\u00a0<\/p>\n\n\n\n

Old Mutual remained the majority shareholder of Nedbank for roughly 30 years, but announced that it would unbundle the big four banks in 2016. <\/p>\n\n\n\n

The unbundling of Nedbank was part of a managed separation. In September 2018, the group announced the unbundling of its majority shareholding in Nedbank to its shareholders.<\/p>\n\n\n\n

Old Mutual\u2019s 52% stake in Nedbank was reduced to a 19.9% minority stake, held by Old Mutual Life Assurance Company South Africa Limited (OMLACSA). <\/p>\n\n\n\n

The total distribution to Old Mutual shareholders was roughly R43.2 billion, which was about a third of the group\u2019s market cap. <\/p>\n\n\n\n

The move was designed so Old Mutual could maintain a strategic, arms-length relationship while simplifying its own operations.<\/p>\n\n\n\n

It would also allow investors to participate in the different investment merits of both financial service companies.\u00a0<\/p>\n\n\n\n

In 2021, Old Mutual announced its intention to unbundle another 12.2% stake in Nedbank, marking a total distribution to Old Mutual shareholders worth roughly R10 billion. <\/p>\n\n\n\n

This would see Old Mutual\u2019s interest in Nedbank drop further to around 7.2%, with the remaining shares again owned by OMLACSA.<\/p>\n\n\n\n

This shareholding has since dropped further, with Nedbank\u2019s website showing that Old Mutual\u2019s shares in the company now only stand at 3.9%. <\/p>\n\n\n\n

Nedbank is one of South Africa\u2019s largest banks and has a market cap of R115 billion, double that of Old Mutual\u2019s R57 billion. <\/p>\n\n\n\n

However, both groups remain relatively cheap compared to their peers, with price-to-earnings (P\/E) ratios of around 6. <\/p>\n\n\n\n

For context, their competitor Capitec has a P\/E ratio of 29, given its high growth potential. Stocks with P\/E ratios of around 20 or less are generally seen as cheap.<\/p>\n","protected":false},"excerpt":{"rendered":"

Old Mutual is on the cusp of launching its new bank, just a few short years after unbundling its majority stake in Nedbank. <\/p>\n","protected":false},"author":10,"featured_media":834216,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1799,1110],"class_list":["post-834347","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-nedbank","tag-old-mutual"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834347","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\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=834347"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834347\/revisions"}],"predecessor-version":[{"id":834369,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834347\/revisions\/834369"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/834216"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834347"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834347"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834347"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}