By Shaun Jacobs.
Old Mutual Bank has appointed Clarence Nethengwe as its new CEO, with the bank set to be launched before the end of 2024.
Nethengwe is set to take over from Rolf Eichweber, who was CEO of OM Bank-Build and oversaw the effective creation of the bank.
“Clarence, a long-standing executive of Old Mutual, is suitably qualified to lead the bank as it prepares to go live,” the company said in a statement.
He has passionately advocated the Group’s Integrated Financial Services (IFS) strategy and recognised early on the pivotal role banking would play as a growth opportunity for Old Mutual.
Nethengwe was instrumental in developing the initial business case and appointing the first key executives for the Bank.
The Bank is a crucial part of Old Mutual’s IFS strategy, and Nethengwe, as the MD of Mass & Foundation, is well-positioned to ensure seamless alignment across the group as we prepare to launch.
Having been at the insurer for over 15 years, Nethengwe has experience in leading Old Mutual Finance – the company’s unsecured lending business.
He has also overseen Old Mutual’s transactional banking operations through its Money Account offering, with the backend done by Bidvest Bank, and its home loan operations.
Consequently, the leadership of Retail Mass will soon be transitioned to a new leader, allowing Clarence to focus on his broader responsibilities.
Simultaneously, Old Mutual announced the resignations of Rolf Eichweber, CEO of OM Bank-Build, and Royden Volans, COO of OM Bank-Build, effective 31 July 2024.
Both Rolf and Royden will remain in their positions until 31 October 2024 to ensure a smooth leadership transition.
“The transition from a ‘bank-builD’ phase to a ‘bank run’ phase marks an exciting new chapter in our journey,”Old Mutual CEO Iain Williamson said.
“While we greatly value the immense contributions of Rolf and Royden, we are confident that we have the right skills and leadership in place to take the bank forward and ensure its success.”
A key focus over the next period is ensuring the OM Bank executive committee has a complement of core skills. As its next growth phase takes off, the bank will ramp up more hires, Old Mutual said.
Old Mutual is set to wade into a highly competitive space, with competition between established incumbents and fintechs heating up in recent years.
The Bank has been granted its Section 17 approval from the Prudential Authority to establish a bank and is in the process of testing its systems with selected partners.
Upon successful, error-free testing, the new OM Bank will fully integrate into the National Payments System.
“Establishing a bank within the group will allow us to maintain a primary relationship with our customers, driving greater regular interaction with them and enhancing cross-sell opportunities across the group,” the insurer said in its most recent annual report.
“It will also enable the group to accept retail deposits, thereby providing a cheaper source of funding.”
The company’s annual report also revealed its target market, which is set to pit it directly against Capitec.
In particular, the insurer is targeting the upper mass market and lower affluent consumers – customers earning between R5,000 and R80,000 per month.
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 has previously said that the core of the bank’s client base would be mass-market South African consumers rather than middle- to upper-income clients.
The insurer plans to leverage the 3.1 million customers served by its Mass and Foundation cluster to lure new clients to its new bank offering.
This cluster serves low-income and lower-middle-income individuals, who typically earn between R1,000 and R30,000 per month.
These customers, which include salaried workers such as police officers, teachers, and nurses, are served via a range of offerings, including life and funeral insurance as well as savings and lending products.
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.