Old Mutual Launches New R2.8 Billion Bank in South Africa: What You Need to Know

Old Mutual is making waves in South Africa’s financial sector with the launch of its new R2.8 billion bank, set to roll out in the fourth quarter of 2025. The bank, which will not carry the Old Mutual name due to regulatory requirements, aims to compete in the retail mass market, taking on established players like Capitec. Here’s everything you need to know about this ambitious venture.

A New Player in Retail Banking

OM Bank, as it will be known, recently appointed Clarence Nethengwe as its CEO. Nethengwe, who previously headed Old Mutual’s Mass and Foundation Cluster, brings a wealth of experience to the role. The bank’s board of directors has also been finalized, with Nomkhita Nqweni serving as the inaugural chairperson. The Prudential Authority granted OM Bank its banking license in March 2025, paving the way for its national rollout.

Strategic Goals and Financials

Old Mutual has invested a cumulative R2.8 billion between 2022 and 2024 to build the bank and secure a deposit-taking retail banking license. However, the group anticipates an initial loss run rate of R1.1 billion to R1.3 billion, with the bank expected to break even by 2028.

“The launch of OM Bank in South Africa is a material catalyst to our strategic delivery journey and a concrete realization of our ambition to build an integrated financial services business,” said Old Mutual Group CEO Iain Williamson. He emphasized that the bank will adopt a phased approach to customer acquisition, integrate the Old Mutual Rewards Programme, and position itself for long-term competitive advantage.

Targeting the Mass Market

OM Bank will operate in the retail mass market, directly competing with Capitec, which boasts over 20 million customers. By leveraging Old Mutual’s existing customer base, trusted brand, and expansive distribution network, OM Bank aims to deliver a digital-first banking experience at scale.

The bank’s cloud-based platform will offer a seamless, scalable single-facility account with debit, credit, overdraft, and savings facilities. This approach is designed to empower customers with greater financial control while lowering the cost to serve.

Challenges and Opportunities

Despite the optimistic outlook, OM Bank faces significant challenges. South Africa’s household debt-to-disposable income ratio remains high at 62.2%, and consumer confidence has yet to fully recover. However, Old Mutual’s strong financial performance in 2024 provides a solid foundation for the new venture.

In its 2024 financial results, Old Mutual reported a 14% growth in adjusted headline earnings and a 17% increase in adjusted headline earnings per share. Funds under management grew by 10% to R1.5 trillion, driven by strong performances in equities and money market assets across South Africa, Malawi, and Kenya.

Dividends and Future Prospects

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. This financial stability positions the group well to support OM Bank’s launch and initial operational losses.

The launch of OM Bank marks a significant milestone for Old Mutual as it expands its footprint in South Africa’s competitive retail banking sector. With a focus on digital innovation, customer empowerment, and strategic growth, OM Bank aims to carve out a niche in the mass market. While the road to profitability may be challenging, Old Mutual’s strong financial foundation and strategic vision suggest that OM Bank could become a key player in South Africa’s financial landscape.

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