The South African banking sector is in for some major changes next year, including closures and new players popping up onto the scene, Cape {town} Etc reports.
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On Thursday, FirstRand Limited confirmed that HSBC Bank plc (HSBC) will transfer its clients, its banking assets, liabilities and employees of its South African branch to FirstRand’s wholly owned subsidiary FirstRand Bank Limited (FRB).
The South African exit comes amid a wider shift towards Asia. The transfer will be led and implemented by FirstRand’s corporate and investment (CIB) banking franchise, Rand Merchant Bank (RMB).
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‘This transaction delivers further scale to RMB’s corporate client franchise, bringing high-quality assets and liabilities with the opportunity to service a valuable client base of domestic corporates and multinationals operating in South Africa and across the continent, which is a key part of RMB’s growth strategy,’ a SENS statement by RMB CEO Emrie Brown read.
‘The transfer also includes the employees of HSBC South Africa which brings strong skills into our business and ensures continued service excellence.’
The transaction should be completed during the fourth quarter of 2025.
While one bank is making its way out of South Africa, another is gearing up to open its doors.
Earlier this year, pan-African investment, savings, insurance, and banking group Old Mutual announced regulator approval to establish OM Bank in 2025.
‘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,’ Old Mutual CEO Iain Williamson said at the time.
In April, the company stated that integration testing and connection to the national payments system would be the next steps.
During a news conference on Thursday, Williamson announced that the bank will be launched in three stages.
According to Williamson, technical and operational progress regarding building the bank is ahead of schedule. The integration testing and connection to the national payments system have since been completed.
The public launch is scheduled for the first quarter of 2025. Thereafter, a campaign to convert existing money account customers will be launched, followed by the launch of full-scale operations.
Williamson told Reuters that the group acknowledges its competition, which includes Absa Bank, FirstRand’s First National Bank and Standard Bank, as well as digital banks such as Discovery Bank.
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Picture: Ali Mkumbwa / Unsplash
