Bank Zero, the South African digital-first mutual bank founded by former First National Bank CEO Michael Jordaan, has reached profitability earlier than expected as it prepares for a R1.1 billion ($67.7 million) acquisition by Lesaka Technologies. The app-only bank became profitable last month, months ahead of its December break-even target.

First announced in June 2025, the Bank Zero acquisition is a cornerstone of Lesaka’s strategy to deepen its footprint in Southern Africa’s digital financial services market.

Growth comes through partnerships

The app-only bank’s co-founder and chairman Jordaan, said profitability has been helped by alliance banking partnerships that let fintechs, retailers and digital platforms issue cards through Bank Zero’s infrastructure. The lender has about 275,000 customers, including businesses and high-net-worth individuals, and expects its partnerships with Lesaka to add about 2 million more.

The bank is also seeking regulatory approval to enter lending and foreign-exchange transactions, with a decision expected by year-end. Bank Zero plans to use its roughly R860 million ($53 million) deposit base to fund lending, alongside capital Lesaka may provide after completing the acquisition, Jordaan said.

Banking competition intensifies

Bank Zero’s expansion comes as competition for South African banking customers increases. Insurers, retailers and telecommunications companies are pushing deeper into financial services, seeking to generate more revenue from existing customer relationships in an economy that has grown by an average of less than 1% over the past decade.

“The race is heating up,” Jordaan said. He spent a decade leading First National Bank, part of FirstRand. He said greater competition could benefit consumers through improved merchant acceptance for electronic payments and increased pressure on banks to keep fees competitive.

A different banking model

Bank Zero, a digital-first mutual bank, launched publicly in 2021 after being founded in 2018 by Jordaan, Yatin Narsai and five other co-founders. Jordaan and Narsai, a former FNB chief information officer who is now Bank Zero’s CEO, conceived the lender after discussing how they would build a bank differently if given another opportunity.

The founders chose a no-fee model and developed most of the bank’s technology internally, helping keep operating costs low. Bank Zero says it is 45% black-owned and 20% women-owned, with services designed for individuals and businesses.

Lesaka deal expands reach

Lesaka, a South African financial technology company, provides banking, payments and enterprise services to consumers and merchants across Southern Africa. Its planned acquisition of Bank Zero is expected to broaden the lender’s customer reach while giving Lesaka access to the bank’s technology and banking infrastructure.

Jordaan also runs venture capital firm Montegray Capital, which has invested in cryptocurrency exchange VALR and Purple Group, the company behind investment platform EasyEquities. He is also involved in Bartinney, his family’s wine estate about 60 kilometers east of Cape Town.