Old Mutual has been given the initial approval to launch a bank in South Africa.
The Prudential Authority (PA), an organisation that falls under the SA Reserve Bank (Sarb) gave this approval that would allow Old Mutual to create the bank, subject to conditions.
Old Mutual’s section 16 application for a licence to establish a bank was approved by the authority and Old Mutual said the new bank will be called OM Bank.
The financial institution said that it has already completed its infrastructure and digital platform build back in 2023.
Iain Williamson, Old Mutual chief executive said: “We are extremely pleased to have received the regulator's go-ahead and look forward to shaking up the financial services space with new innovations and solutions. We can confirm that the launch is on track”.
The OM Bank will now conduct integration testing and then connect to South Africa’s national payments system.
“Upon successful error-free testing, the new OM Bank will fully integrate into the National Payments System,” the company said.
According to Old Mutual’s financial results for the year ended December 2023, the new bank build remains on track and the company hopes to launch it by the end of the year.
Last month, the Johannesburg Stock Exchange (JSE) listed insurer Old Mutual was caught in a fierce public storm after the Molefi family accused it of withholding pension funds meant for the wife after a complex divorce decree.
Old Mutual and the Molefi’s have since come to an agreement in principle, although further discussions between the two are still ongoing.
A women centric bank
This is not the only new bank coming to South Africa.
The Multi-Party Women’s Caucus (MPWC) said in early March that progress has been made in establishing a new cooperative bank.
The Young Women in Business Network (YWBN) Mutual Bank will be more of a formalised stokvel than a mutual or commercialised bank.
The MPWC noted that the bank will prioritise women, youth and people living with disabilities.
YWBN will charge a R500 membership fee and a non-refundable R100 administrative fee for each individual that decides to join the bank.
It will charge companies that want to join a R1,000 membership fee and a non-refundable R100 administrative fee.
The bank has a target of trying to get 10,000 new members and R5 million in the next 11 months as soon as SAIFSC gets its approval.
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