After nearly two centuries of shaping South Africa’s financial landscape, Old Mutual is writing its next chapter, returning to retail banking with OM Bank, set to debut across the country in Q4 2025.
This move comes nearly a decade after the company divested its majority stake in Nedbank, signalling a strategic switch to capture the fast-growing mass market banking segment.
With a R2.8 billion investment and a digital-first approach, OM Bank is on track to challenge industry giants like Capitec, African Bank, and Tyme Bank.
A New Chapter in Old Mutual’s Legacy
Old Mutual’s return to retail banking is no small achievement. After holding a 53% stake in Nedbank from 1986 until its unbundling in 2018, the company reduced its shareholding to a mere 3.9% by 2025, with Nedbank’s market cap now at R115 billion compared to Old Mutual’s R57 billion.
The decision to launch OM Bank reflects a bold strategy to diversify revenue streams and tap into South Africa’s underserved mass market, where competitors like Capitec boast a price-to-earnings (P/E) ratio of 29, far outpacing Old Mutual and Nedbank’s P/E of around 6.
Why Now?
South Africa’s mass market banking sector is booming, driven by increasing digital adoption and demand for affordable financial services.
Old Mutual, already a player in micro-lending with an R16 billion unsecured lending book and 400,000 active transactional account users, sees OM Bank as a “no-brainer” to consolidate its financial offerings under one cohesive entity.
READ ALSO:Old Mutual Customers to Benefit from Competitive Rates with OM Bank Launch in Q1 2025
The company’s extensive customer base, trusted brand, and nationwide distribution network provide a solid foundation to compete in this crowded space.
OM Bank: What to Expect
OM Bank is designed to disrupt South Africa’s banking sector with a digital-first, customer-centric model. Here’s a breakdown of its key features:
1. Digital-First Platform
- Powered by 10x Banking’s cloud technology, OM Bank will offer a scalable, single-facility account integrating debit, credit, overdraft, and savings features at lower costs.
- A smartly designed mobile app will serve as the primary interaction point, complemented by Old Mutual’s physical branch network for customer support.
2. Target Market
- Aimed at South Africans earning between R5,000 and R80,000 per month, OM Bank will cater to the upper mass market and lower affluent segments, directly competing with Capitec’s dominance.
3. Leadership and Governance
- Clarence Nethengwe, former head of Old Mutual’s Mass and Foundation Cluster, steps in as CEO, bringing deep expertise in serving underserved communities.
- Nomkhita Nqweni chairs the board, ensuring robust governance as OM Bank navigates its launch and growth phases.
4. Financial Outlook
- Old Mutual invested R2.8 billion from 2022 to 2024 to secure a deposit-taking retail banking licence, granted in March 2024.
- Initial losses are projected at R1.1 billion to R1.3 billion, with breakeven expected by 2028, reflecting a long-term commitment to profitability.
Why OM Bank Stands Out
Unlike traditional banks, OM Bank leverages Old Mutual’s existing ecosystem to cross-sell banking products, offering personalised, transparent, and affordable solutions.
Its cloud-based infrastructure ensures scalability, while its focus on financial inclusion aligns with South Africa’s push for broader access to banking services.
With competitors like Capitec setting the pace, OM Bank’s ability to integrate banking with Old Mutual’s broader financial services, like insurance and wealth management, could give it a competitive edge.
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What This Means for You
For consumers, OM Bank promises a fresh alternative with competitive rates and a user-friendly digital experience.
For investors, it’s a chance to back Old Mutual’s ambitious growth strategy in a high-potential market. As Clarence Nethengwe puts it, “We want to empower ordinary South Africans with transparent, accessible, and fairly priced solutions.”
Join the Conversation
Will OM Bank shake up South Africa’s banking sector, or will it struggle against established players like Capitec? Share your thoughts below, and stay tuned for updates on this transformative journey!
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
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