Losses mount, but Old Mutual Bank is signing up thousands daily

CEO Clarence Nethengwe is unfazed by the losses, and he has every right to his position – the bank is already sitting on just more than 31,000 customers and adding an average of 1,000 to 2,000 customers per business day. 

Old Mutual Bank was initially launched to about 200 employees around April 2025, before the net widened in August to onboard about 5,000. “Then we started onboarding Money account customers and opened it to the public about five weeks ago. On Saturdays, we still see about 1,000 new customers coming on and that drops to about 300 on Sundays,” he told Daily Maverick.

Although the bank reported a widening loss of R579-million in the six months to the end of June 2025, worse than the R488-million loss in the previous period, he remains confident that it is on target to break even around 2028.

Nethengwe told Daily Maverick that the group’s guidance remains unchanged: annual losses of between R1.1-billion and R1.3-billion for the next two years, before moving towards monthly break-even in 2028. More details are expected at Old Mutual’s annual Capital Markets Day in October. 

R1.7bn war chest 

Despite the red ink, Old Mutual has earmarked R1.7-billion in discretionary capital for OM Bank in 2026. The allocation will be used to fund customer acquisition, expand loan and deposit books and grow its digital and distribution capacity. 

The bank currently employs 330 staff, with plans to expand to about 400 on the digital side and between 3,000 and 3,500 staff by 2028 through Old Mutual Finance. Hiring, Nthengwe said, is essential to support distribution growth, though costs would be tightly managed in a worsening economic climate. 

In an environment littered with challenger fintech banks, Old Mutual Bank has invested in strong technical partners – Amazon Web Services for cloud hosting and 10x for core banking systems. Other partners include Feedzai for fraud detection and AML services and Mastercard as the card processing service provider. Although the bank has invested heavily upfront in digital infrastructure, ongoing spending on systems is expected to be limited, with most investment now going into customer-facing improvements and user experience. 

One unresolved question is how Old Mutual will balance shareholder returns with the heavy capital demands of bank building. The group’s solvency ratio has slipped to 172% partly due to a R3-billion share buyback, raising questions about competing priorities. For now, though, management insists that OM Bank’s future justifies the cost. “We need to attract customers, have a compelling value proposition and leverage both digital and physical assets. That’s how we’ll earn our right to win,” Nthengwe concluded. DM