New bank taking on Capitec gets green light to launch

Old Mutual has announced that the South African Reserve Bank’s Prudential Authority has approved OM Bank’s appointment of Clarence Nethengwe as CEO, effective immediately, giving the bank the green light to launch.

OM Bank will compete directly with Capitec. It is targeting a soft launch for a select number of customers in Q2 and Q3 of 2025, followed by a public launch in the fourth quarter of the year.

The bank announced Nethengwe’s appointment in September 2024, targeting 1 November 2024 as the day on which he’d take on CEO responsibilities.

However, it noted that his appointment was subject to regulatory approval, which OM Bank has now received.

“OM Bank is a crucial component of the Group’s Integrated Financial Services strategy to empower South Africans to move towards financial wellness,” says Old Mutual Group CEO Iain Williamson.

“By approaching financial services to improve the lives of our customers and communities, Clarence’s leadership experience serves as a powerful foundation for OM bank to flourish.”

Nethengwe said he sees a unique opportunity to bring change to the banking industry.

“Our vision for OM Bank is to ensure that customers are not only able to access transparent and personalised financial services and tools but, more importantly, to partner with them so that these tools improve access to banking and credit,” he said.

“At OM Bank, everyone will be treated equally because what distinguishes customers is what they want from their bank, not their status or financial muscle.”

Nethengwe has substantial experience in the space, having been with Old Mutual for over 15 years, during which time he oversaw Old Mutual Finance.

The CEO position has been vacant since 31 October 2024. This followed the resignation of former OM Bank-Build CEO Rolf Eichweber and COO Roydan Volans.

The pair agreed to remain in their respective roles until 31 October 2024 to ensure a smooth leadership transition.

Old Mutual believes OM Bank will attract new unbanked customers in South Africa. It also believes its services will benefit the country’s “banked” residents.

“The ‘banked’ are, in many ways, underserved or underbanked, as they lack access to banking services beyond basic transactional facilities,” it told MyBroadband.

“That is the main problem we’ve set ourselves to solve.”

Old Mutual said its mobile virtual network operator service, launched in October 2024, will support its customers’ use of OM Bank.

“Affordable data and connectivity are critical for our customers to fully participate in the mainstream economy and an important enabler for our customers to transact with all propositions digitally, including OM Bank, when we launch,” it said.

Dubbed Old Mutual Connect, the insurance giant said it will offer competitive mobile services to transform mobile connectivity for lower-income users.

Old Mutual Connect customers can get a SIM card from any Old Mutual branch, with prices starting from R5. Customers can buy data and airtime from branches and partners or through digital channels.

Following its public launch, OM Bank plans to run a campaign to convert Old Mutual money account holders.

The bank received the Prudential Authority’s approval in April 2024, two years after Old Mutual secured its banking licence.

At the time, it said the next steps involved integration testing and connecting to the National Payments System.

Old Mutual believes adding transactional banking capabilities to its service offerings will help it engage with customers more regularly.

The company says its customer-centric approach accelerated the value of new business by 37% in 2023. It hopes that OM Bank will help it improve this further.

It also believes that accepting retail deposits through a bank will provide a more affordable funding source.