By Adelaide Changole.
The fight for banking clients is hotting up in South Africa as the newest entrant works to become the preferred lender in a key sector of the continent’s biggest economy.
OM Bank is a unit of Old Mutual, Africa’s largest insurer by assets, and is seeking a foothold in a market that already features five of the continent’s top banks as well as the most prominent insurance players in the region.
“The biggest driver of this entry was the convergence that was taking place in the market between banks and insurance,” Chief Executive Officer Clarence Nethengwe said in an interview. “Many of the banks were getting into insurance — they were setting up their insurance divisions and we felt that from a competitiveness perspective, we had to get into banking ourselves.”
The lender faces an uphill climb, with 81% of South Africans already holding an account. Further, the so-called traditional big-four banks in the country – Standard Bank Group, FirstRand, Absa Group, and Nedbank Group — have about 83% of the nation’s R5.8 trillion ($360 billion) of banking assets. They are expected to post combined headline earnings surpassing R139 billion by the end of 2026, according to S&P Global.
They are also expanding in insurance, obtaining licenses to offer car, home and credit cover, as well as funeral plans. Newer fintech entrants are also fighting for a piece of the action.
Old Mutual’s decision renews its rivalry with fellow insurer Sanlam, which has received approval to provide transactional banking services in partnership with digital lender GoTymebank by the first quarter of 2027. Discovery, South Africa’s largest medical-insurance administrator, also started its lender in 2019and posted a full-year profit in the 12 months ended June.
OM Bank started in August 2025 and has attracted nearly 4 500 customers daily in the eight months to August, lifting its number of clients to 1 million by September. Of these, 68% are already existing Old Mutual customers, while 32% are new to the group.
The insurer spent R2 billion setting up the bank, and injected a further R3.2 billion between 2025 and 2026. It has budgeted R2 billion more by 2028 when the lender is expected to break even, or even turn profitable.
To meet its goals, the lender plans to keep its focus on clients earning between R15 000 to R50 000 monthly. It expects to ramp up customers to as many as 2.8 million by 2028.
It will also leverage the repositioning of an existing insurance-savings product that has accumulated as much as R32 billion over time — and grows by about R1.5 billion annually — to drive deposits to as much as R10 billion by 2028.
“We expect to start paying dividends by 2032, potentially,” he said.