<\/p>\n
The fight for banking clients is hotting up in South Africa as the newest entrant works to become the preferred lender in a key sector of the continent\u2019s biggest economy.<\/p>\n
OM Bank is a unit of Old Mutual, Africa\u2019s largest insurer by assets, and is seeking a foothold in a market that already features five of the continent\u2019s top banks as well as the most prominent insurance players in the region.<\/p>\n
Read:
SA not overbanked \u2013 Investec
Old Mutual wants South Africa\u2019s newest bank profitable by 2028<\/p>\n
\u201cThe biggest driver of this entry was the convergence that was taking place in the market between banks and insurance,\u201d Chief Executive Officer Clarence Nethengwe said in an interview. \u201cMany of the banks were getting into insurance \u2014 they were setting up their insurance divisions and we felt that from a competitiveness perspective, we had to get into banking ourselves.\u201d<\/p>\n
The lender faces an uphill climb, with 81% of South Africans already holding an account. Further, the so-called traditional big-four banks in the country \u2013 Standard Bank Group, FirstRand, Absa Group, and Nedbank Group \u2014 have about 83% of the nation\u2019s R5.8 trillion ($360 billion) of banking assets. They are expected to post combined headline earnings surpassing R139 billion by the end of 2026, according to S&P Global.<\/p>\n
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They are also expanding in insurance, obtaining licenses to offer car, home and credit cover, as well as funeral plans. Newer fintech entrants are also fighting for a piece of the action.<\/p>\n
Old Mutual\u2019s decision renews its rivalry with fellow insurer Sanlam, which has received approval to provide transactional banking services in partnership with digital lender GoTymebank by the first quarter of 2027. Discovery, South Africa\u2019s largest medical-insurance administrator, also started its lender in 2019and posted a full-year profit in the 12 months ended June.<\/p>\n
Read:
OM Bank bets on simplicity in a complex market
Old Mutual taps external talent for new business leaders<\/p>\n
OM Bank started in August 2025 and has attracted nearly 4 500 customers daily in the eight months to August, lifting its number of clients to 1 million by September. Of these, 68% are already existing Old Mutual customers, while 32% are new to the group.<\/p>\n
The insurer spent R2 billion setting up the bank, and injected a further R3.2 billion between 2025 and 2026. It has budgeted R2 billion more by 2028 when the lender is expected to break even, or even turn profitable.<\/p>\n
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To meet its goals, the lender plans to keep its focus on clients earning between R15 000 to R50 000 monthly. It expects to ramp up customers to as many as 2.8 million by 2028.<\/p>\n
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OM Bank is up and running and ready to transact<\/p>\n
It will also leverage the repositioning of an existing insurance-savings product that has accumulated as much as R32 billion over time \u2014 and grows by about R1.5 billion annually \u2014 to drive deposits to as much as R10 billion by 2028.<\/p>\n
\u201cWe expect to start paying dividends by 2032, potentially,\u201d he said.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Bank #seeks #banks #insurers<\/p>\n","protected":false},"excerpt":{"rendered":"
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