Business
Bank Zero Sold to Lesaka in R1.1 Billion Deal with Big Growth Plans
A turning point for South African digital banking
Bank Zero, the low-cost digital bank that burst onto the local scene in 2021, is about to enter a new chapter. Lesaka Technologies has announced plans to buy the bank for R1.1 billion, a move that could reshape both companies’ futures in South Africa’s competitive financial landscape.
Founded in 2018 by well-known banking veterans Michael Jordaan and Yatin Narsai, both previously with FNB, Bank Zero has built its reputation on affordability, security, and slick technology. In just three years of public operation, it has exceeded its early targets with more than 40,000 funded accounts and deposits topping R400 million.
Why Lesaka wants Bank Zero
Lesaka, a company listed on both the JSE and Nasdaq, is best known for its payment services through brands like Kazang, Adumo, and EasyPay. By adding Bank Zero to its portfolio, Lesaka hopes to cut costs, reduce third-party reliance, and offer more to its existing customer base, which ranges from township merchants to enterprise clients.
Lesaka’s Executive Chairman, Ali Mazanderani, described Bank Zero as the most efficient banking operation in South Africa today. The deal, still awaiting regulatory approval, would give Lesaka 100% ownership of Bank Zero’s shares. Bank Zero’s shareholders will, in turn, hold about 12% of Lesaka’s fully diluted shares once the deal closes.
What it means for customers
Bank Zero customers are known to be digitally savvy, high-value users, often entrepreneurs and high-income earners. With a patented bank card that has not recorded a single fraud case since launch, the bank’s focus on security has stood out in an era where data breaches and scams have become everyday concerns. Its infrastructure, built on IBM Z mainframes and LinuxONE technology, offers a secure backbone that Lesaka can now integrate into its own systems.
For clients, the merger could mean expanded services. Bank Zero is already applying for a foreign exchange licence, opening the door for cross-border opportunities. With Lesaka’s extensive merchant network, customers may also see new products that link banking, payments, and business tools in one ecosystem.
Big names stay on board
Jordaan is expected to join the Lesaka board, while Narsai will move into the executive leadership team. Their continued involvement signals stability for customers and investors who might otherwise be wary of change.
The numbers behind the deal
The R1.1 billion transaction is mostly structured in Lesaka shares, with up to R91 million in cash. Should it go ahead, Lesaka will also be able to reduce its gross debt by around R1 billion by moving parts of its consumer and merchant book into Bank Zero.
Bank Zero’s growth momentum has been strong: year-on-year card purchases and electronic fund transfers have both risen by more than 50%, with card spending hitting R415 million in 2024. Break-even was originally forecast for 2027, but insiders now believe profitability may come sooner, thanks to Lesaka’s wider reach.
A fresh angle: South Africa’s banking evolution
The deal speaks to a broader shift in South African banking. Digital-first challengers like TymeBank and Discovery Bank have pushed established players to modernise. Bank Zero’s sale shows how quickly fintechs can become attractive acquisition targets for companies looking to broaden their ecosystems.
For Lesaka, it is about more than just acquiring a bank. It is about creating an integrated platform that reaches everyone from spaza shop owners to affluent digital natives. For customers, it could mean more choice and lower costs in a sector often criticised for high fees.
The question now is whether Lesaka can scale Bank Zero’s vision without losing the lean, efficient DNA that made it appealing in the first place.
Also read: Liqui Fruit Faces Setback as Mashatile Pushes for Stricter BEE
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Source: Business Tech
Featured Image: X (formerly known Twitter)/@BankZeroSA
