South Africa’s newest bank hits 1 million customers a year after launch

OM Bank has surpassed the 1-million-customer milestone just a year after its public launch, as it races to break even in 2028. 

The bank’s rapid growth has benefitted from Old Mutual’s existing ecosystem, branch network, and the years of growth its Money Account offering has had. 

It will have to sustain this growth over the next two years if it wants to break even in 2028 and begin to take a share of South Africa’s banking profit pool. 

The bank is aimed at customers making between R5,000 and R80,000 per month, with a particular focus on those earning below R50,000.

This segment has traditionally been dominated by Capitec, but Old Mutual’s funeral insurance product is deeply embedded in this market. 

Old Mutual’s mass and foundation cluster tailors its insurance offering to this market and has been dominant. OM Bank aims to leverage this and replicate its success. 

The growth of 4,500 new clients per day is roughly on par with Capitec’s growth rate, with CEO Clarence Nethengwe telling Daily Investor that 50% of these clients are completely new to Old Mutual. 

This means the bank is popular beyond its existing customer base and can serve as the group’s main growth engine. 

It still has some runway to go with Old Mutual’s mass-market customer base, which numbers 14 million and has 7,245 tied financial advisors. 

However, the bank’s rapid growth has surprised Old Mutual somewhat and necessitated a shift in strategy. 

In its interim results presentation, Old Mutual outlined plans to make the bank an ecosystem anchor where it becomes the primary growth engine for the group. 

“We will effectively leverage existing businesses for their distribution, their customers, and their flows to capture opportunities from that,” Nethengwe said. 

This will keep more of the customers’ financial activities within the Old Mutual ecosystem, providing valuable data and opportunities to grow earnings. 

The bank’s growth has surprised Old Mutual CEO Jurie Strydom, with the initial strategy focusing on ensuring the bank has the right to win against its competitors. 

“We are already moving from establishing that right to win to actually contesting the banking profit pool and turning the bank into a growth engine,” Strydom told Daily Investor. 

Nethengwe is under pressure to break even in 2028, but this is pressure he and his team are relishing. 

“Our model tells us that if we can get customer activity to between 36% and 38%, that should be enough for us to break even,” Nethengwe said. 

“In the next six months, the core banking rollout should be completed, and then we can look beyond that. But, we must get banking right first.”

Nethengwe is laser-focused on the bank’s 2028 break-even target, saying that questions must be asked if losses do not begin to narrow in the second half of the 2026 financial year. 

He explained that it is key to show investors that the bank will be profitable and not allow any doubt that it could miss its targets. 

Nethengwe also knows just how important the bank is to turning around the fortunes of Africa’s largest insurer by assets. 

“I wish I could just jump to 2028 because when you break even, that share price that has been long suffering will rise quickly. I am doing this for the shareholders,” Nethengwe said.