Old Mutual expects OM Bank’s customer base to exceed one million by the end of September, although the bank’s rapid expansion has come at a cost: its operating loss widened, while higher credit impairments contributed to a larger loss in the group’s broader Banking cluster.
OM Bank increased its transactional banking customer base from 284 000 at the end of 2025 to 742 000 by the end of June, according to Old Mutual’s interim results for the six months to 30 June 2026.
Retail deposits stood at R1.38 billion at the end of the reporting period, up from R272 million at the end of 2025.
Old Mutual said approximately half of the customer growth came from new customers adopting its transactional and savings propositions, with the remainder supported by the migration of legacy Money Account customers.
In an update included in its results presentation, Old Mutual said OM Bank’s customer base was expected to exceed one million by the end of September. It also said retail deposits had reached R1.6bn by 31 August.
The figures show rapid growth in OM Bank’s reported customer and deposit numbers during its build phase, alongside a wider operating loss at the bank and higher impairments and operating costs in the Banking cluster. Old Mutual is targeting monthly break-even for OM Bank by the 2028 financial year.
Loss widens as Old Mutual builds the bank
OM Bank’s operating loss widened by 32%, from R579m in the first half of 2025 to R764m in the first half of this year.
OM Bank forms part of Old Mutual Banking, a cluster that also includes Old Mutual Finance, Old Mutual Transaction Services, and secured lending.
These businesses were included in the newly structured Banking cluster from 1 January 2026, and the comparative figures were restated to reflect the change.
The Banking cluster recorded an operating loss of R611m, compared with the restated loss of R310m in the corresponding period.
Old Mutual said the cluster’s deterioration was mainly due to a 29% increase in credit impairment charges on the unsecured loan book and higher operating costs as OM Bank continued to invest in scale and integration.
Old Mutual Finance and the cluster’s other operations reported positive results from operations of R153m, down from R269m.
Higher impairments accompany cautious lending
Credit impairment charges in the Banking cluster increased by 29%, from R467m to R601m, while the credit loss ratio rose from 5.7% to 7.3%.
Old Mutual attributed the increase to continued pressure on household affordability and said it was taking a prudent approach to credit risk.
Gross loans and advances in the Banking cluster were broadly unchanged at R16.44bn. Secured lending increased by 21% to R1.53bn, but unsecured lending declined by 1% to R14.91bn.
Old Mutual said the stable loan book reflected a disciplined, risk-adjusted approach to lending in a difficult consumer environment. It attributed the decline in unsecured lending to more cautious lending criteria in response to pressure on consumers.
OM Bank soft-launched an app-based lending proposition during the first half and plans to expand it across the Old Mutual group’s ecosystem during the second half.
Old Mutual also reported strong growth in investment-backed lending during the second quarter following targeted distribution initiatives, while it continued to develop its home-loan offering.
Net interest income in the Banking cluster increased by 4% to R1.16bn, supported by investment returns on the expanding deposit base and lower funding costs in the unsecured lending portfolio.
Net interest margin edged down by 10 basis points to 12.3%. The margin measures how effectively the business generates interest income from lending and investments after paying interest on deposits and other funding, relative to its interest-earning assets.
Non-interest revenue declined by 6% to R466m. Old Mutual attributed the decrease to lower transactional revenue as activity on the legacy Money Account was wound down but had not yet fully migrated to the OM Bank platform.
Lending and insurance-related non-interest revenue was stable, reflecting the group’s cautious approach to lending.
Using Old Mutual’s existing distribution reach
Old Mutual Banking serves customers earning between R8 000 and R80 000 a month, with a particular focus on those earning between R15 000 and R50 000.
The group describes its distribution model as digital-first and hybrid. The mobile app is the main engagement channel, supported by branches for assisted sales and digital adoption and by contact centres for servicing.
Old Mutual also intends to use its existing customer relationships and distribution footprint to support OM Bank and develop integrated propositions across the group.
In illustrating the reach available to support the strategy, Old Mutual’s presentation cited a South African retail ecosystem encompassing seven million customers, 7 245 retail intermediaries, 357 branches, and 40 334 worksites. The figures were presented as indicators of Old Mutual’s existing retail reach rather than as measures of OM Bank’s first-half performance.
Products identified for development or expansion include fixed deposits, credit cards, investment-backed loans, and home loans. Old Mutual also intends to use its rewards programme and broader ecosystem to deepen customer relationships and support integrated propositions across its businesses.
Old Mutual’s long-term strategy includes consolidating Old Mutual Finance, Old Mutual Transaction Services, and secured lending into the OM Bank Holding Company, subject to regulatory approval.
Targets for 2028
Old Mutual’s presentation sets a target of between 2.5 million and 2.8 million active Old Mutual Banking customers by FY2028.
The Banking cluster is also targeting retail deposits of between R8bn and R10bn and plans to grow gross loans from R16.4bn to between R23bn and R26bn.
New credit products, including credit cards and secured lending, are targeted to account for between 20% and 30% of the loan book, compared with 9% currently.
The Banking cluster is targeting results from operations of between break-even and a R200m profit by FY2028. Old Mutual is separately targeting monthly break-even for OM Bank by FY2028.
The group has committed R2bn of discretionary capital for investment in OM Bank during 2026 and 2027. Management said its priorities for the second half include increasing transactional activity, growing deposits, expanding quality lending, and continuing the integration of the banking businesses.
