Four new banks for South Africa

South Africa is set to get four new banks in the next year, ranging from full-service commercial banks looking to challenge incumbents to state-owned banks focused on specific sectors. 

The country already has 29 banks, and some fear that as more financial institutions enter this space, South Africa will become overbanked. 

South Africa’s financial sector has long been dominated by the country’s ‘Big Four’ banks – Absa, FNB, Nedbank, and Standard Bank. Capitec has been the only real disruptor.

Other banks have targeted specific niches, such as Discovery Bank, which focuses on high-quality clients and individuals within the Discovery ecosystem. 

Many have used technology as the main driver of their disruption, being digital-only banks that are asset-light and flexible compared to traditional incumbents. 

However, the Big Four still dominate the space, with over 90% of mortgages being financed by them, for example. 

The presence of new challengers has not dented incumbents’ financial performance. Despite the challenging local environment, the Big Four’s combined headline earnings rose 13.8% in 2023 to R113.2 billion. 

Furthermore, these banks benefit from geographic diversity as their scale has enabled them to expand into new markets across Africa and offset poor economic growth in South Africa. 

New entrants do not have this luxury, as they are only exposed to the South African economy and its difficult operating environment. 

The scale of these banks has also made them the primary partner for large multinational companies in Africa and enabled them to capture value from the continent’s growing trade with China. 

Thus, many of the new challengers coming this year are not looking to compete directly with these large incumbents but rather dominate specific niches of the market. 

One exception is Old Mutual, which is looking to take on Capitec in the lower-income segments of the market. 

Below is a breakdown of the new banks coming to South Africa this year, what services they plan on offering and when they are expected to launch. 

Old Mutual 

Iain Williamson
Old Mutual CEO, Iain Williamson

Old Mutual has been quiet about when exactly its bank will launch, saying it will come before the end of 2024 after two years of building its capacity. 

At the end of April, it received Section 17 approval to establish a bank, enabling the company to begin testing its processes and capabilities with selected partners before integrating into the National Payments System. 

Old Mutual already has lending and transactional banking products through its Money Account, administered by Bidvest Bank. 

CEO Iain Williamson said the unsecured lending solution is already a strong contributor to group profitability. 

Williamson said the bank build was completed within its initial budget of R1.75 billion at the end of last year. Old Mutual also had an independent audit firm that analysed its systems and processes before seeking regulatory approval. 

Building a bank is central to Old Mutual becoming a fully integrated financial services institution and enabling it to cross-sell more of its products to clients. 

The insurer targets the upper mass market and lower affluent customers, leveraging the 3.1 million South Africans its Mass and Foundation insurance cluster serves. 

This has traditionally been Capitec’s stomping ground. It has done exceptionally well in this segment and has grown rapidly to serve over 20 million customers. 

Williamson said the insurer is well aware of how competitive the country’s banking sector is and is going into this venture with its eyes wide open. 


The Postbank has been operational in South Africa for several years under the South African Post Office but has only recently overcome hurdles to becoming a fully-fledged commercial bank. 

Instead of building a new bank from scratch, the government plans to turn the Postbank into a fully operational state-owned bank separate from the Post Office. 

President Ramaphosa signed the Postbank Amendment Bill into law in September last year, formally transferring the Postbank’s shareholding from the embattled South African Post Office to the government. 

While Postbank has always offered minor banking services through the Post Office, it was strictly a savings subsidiary, unable to offer transactional accounts, credit, and other banking services.

With the Act now in effect, it can apply for a new banking licence from the Reserve Bank’s Prudential Authority. The Postbank has previously said it will resubmit its Section 16 application for the current financial year, with no set date given for its launch.

Postbank’s primary objective will be to offer affordable financial services to communities not catered to by traditional retail banking, SMEs, and the public sector.

the group says about 6.5 million people in South Africa are unbanked, and 15 million existing customers are underbanked. 

In addition, about R12 billion were found outside the formal banking system, excluding stokvels, which can be addressed.

The group sees great opportunity in the SMME sector, quickly becoming the key focus of South Africa’s other big banks.

YWBN Mutual Bank

The Young Women in Business Network (YWBN) received its mutual banking licence at the beginning of 2024, with the Prudential Authority gazetting its registration in January. 

With this licence, the bank aims to launch sometime in 2025 or later as it looks to complete its bank build. 

Mutual banks are different from commercial banks, being ultimately owned by their depositors, who become shareholders in the bank and have input in its decisions through general meetings. 

These banks tend to be more conservative in their investing and lending operations, usually more focused on saving. They are restricted by law in what products they can offer clients. 

There are a small number of mutual banks in the country, including Bank Zero Mutual Bank, Finbond Mutual Bank, and the GBS Mutual Bank. 

YWBN is set to become the first women-owned bank in South Africa and focus on offering small businesses savings and loans. It will also focus on unbanked South Africans. 

South Africa Innovative Financial Services Cooperative 

Nkosazana Dlamini-Zuma drove the creation of the SAIFSC

The Department of Women, Youth and Persons with Disabilities announced earlier this year that it plans to launch a new cooperative bank in South Africa. 

This bank, under the proposed name of South Africa Innovative Financial Services Cooperative (SAIFSC), has not received any banking licence as yet and will be more akin to a formalised stokvel until it does. 

Cooperative banks are more conservative in nature and invest the members’ money into secure funding and government bonds instead of riskier stock exchanges.

They also differ from mutual banks in that they operate under a common bond, either as a group of people who work together or belong to a particular association or geographical area.

By launching a cooperative bank, the department aims to advance the financial inclusion of women, youth, and persons with disabilities. 


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