Old Mutual Group, Africa’s top insurer, is planning to make a significant investment of R2 billion in OM Bank, its new digital-first retail banking venture in South Africa, as part of a broader strategic push to establish a competitive foothold in the banking sector.
The JSE-listed insurer announced today that its discretionary capital balance has reduced to R3.1 billion at 30 June 2026 from R6.1 billion at 31 December 2025.
“This was primarily driven by the completion of the remaining R2.3 billion of the approved R3 billion share buyback programme in the first half of 2026,” said the insurer.
“The remaining discretionary capital balance has been committed to the approved share buyback programme of R1 billion, with R2 billion earmarked for investment into OM Bank in 2026 and 2027.
“Discretionary capital is expected to increase by at least R2 billion in the second half of 2026 following the declaration of a R4 billion dividend by Old Mutual Life Assurance Company (South Africa) Limited.”
Strategic Transformation Underway
During 2025, Old Mutual Group reset its corporate strategy around a clear value creation framework, spanning two phases: Unlocking Value and Generating Growth.
“This is anchored in four strategic priorities: driving competitiveness in our South African businesses, deepening market leadership in Southern Africa, establishing the right to win for OM Bank and evaluating and selectively pivoting in growth markets and initiatives.
“In the first half of 2026, we continued to translate these strategic priorities into tangible delivery.”
OM Bank Gains Significant Traction
The insurer reported that customer acquisition and deposit growth in OM Bank continued to track well during the period, with customer numbers increasing to 742,000 and retail deposits rising to R1.4 billion.
“Leveraging the group’s distribution footprint and integration opportunities supports our pathway to profitability by full year 2028.”
OM Bank has made significant progress in building a scalable, differentiated banking franchise, driven by strong customer acquisition, robust retail deposit growth and continued enhancement of its everyday banking proposition.
“We also advanced the integration of Old Mutual Finance into the Banking cluster, while continuing to strengthen the customer proposition and expand transactional banking capabilities,” said Old Mutual.
“Together, these initiatives are creating a more integrated banking and lending proposition and increasing our ability to deepen customer relationships over time.
“Growth in customers and deposits reflects increasing trust and engagement, while supporting funding diversification and future balance sheet growth.”
Navigating a Challenging Market
The insurer added that this progress was achieved against a subdued economic backdrop, continued pressure on consumer affordability and a highly competitive banking market. While the business remains in a build phase, the trajectory is encouraging.
“An increasingly competitive banking landscape has also reinforced the importance of differentiation, creating opportunities to deepen customer relationships, strengthen our proposition and further leverage the Old Mutual ecosystem,” said Old Mutual.
“Continued enhancements to our product offering and everyday banking capabilities are expected to drive higher transactional activity, stronger engagement and increasingly diversified revenue streams.
“We remain focused on strengthening the quality of our balance sheet and scaling a customer-centric banking franchise that leverages the full breadth of the Old Mutual ecosystem to deliver sustainable long-term growth.”
Banking License and Development Milestones
In March 2025, Old Mutual received Prudential Authority approval for its banking license, marking a critical step in its strategic ambition to build an integrated financial services business.
Since 2021, the company has invested a cumulative R2.8 billion to develop OM Bank and secure a deposit-taking retail banking license.
OM Bank is designed to deliver tangible value to customers while positioning Old Mutual for long-term competitive advantage in a highly competitive market.
By leveraging its trusted brand, extensive distribution network, and existing customer base, Old Mutual aims to scale a digital-first banking platform that offers seamless, cost-effective financial solutions.
The cloud-based platform will provide a single facility account with debit, credit, overdraft, and savings features, empowering customers with greater financial control. Old Mutual also plans to integrate its Rewards Programme into OM Bank, enhancing customer engagement and value.
Path to Profitability
Old Mutual expects OM Bank to achieve break-even with a customer base of between 2 million and 2.5 million.
The launch of OM Bank is a key component of Old Mutual’s broader strategy to optimize its balance sheet, reduce complexity, and enhance returns.
Since its managed separation in 2018, the company has returned R61.6 billion to shareholders, including a special dividend of R4.9 billion, the Nedbank unbundling of R49.5 billion, and cumulative share buybacks of R7.2 billion. Additionally, Old Mutual has distributed ordinary dividends totaling R27.4 billion since 2018.
