Bank Zero has reached its first monthly break-even point, less than five years after launching to the public in October 2021.
According to the digital bank, this was reached in August 2026, following more than a doubling of the bank’s deposit base over the past year.
Business accounts now represent 18% of Bank Zero’s book, compared with the 10% envisaged in its original business case. More than 80% of these accounts are held by registered companies, which the bank says maintain higher balances and process more transactions.
Bank Zero did not reveal its monthly revenue and other financial metrics.
“Bank Zero was built to break-even on a fraction of the customer base a new bank requires,” it says.
“Where comparable entrants have needed well over two million customers to cover their costs, Bank Zero designed and built its own core banking platform to reach the same point at 100 000 customers. The same platform has enabled unique app functionality and made Bank Zero the only bank to have proved that banking without card fraud and phishing is possible.”
Bank Zero says its technology architecture was designed around a lower customer threshold for reaching sustainability than those of comparable new banking entrants.
The digital player developed its own core banking platform rather than relying on the technology infrastructure used by traditional financial institutions. It says cumulative capital investment in building the platform was just below R300 million.
Bank Zero’s business model is built around a branchless, “segment-agnostic” approach that does not offer entry-level accounts and instead uses a zero-fee structure to attract both individual and business customers.
The bank has increasingly focused on business customers, offering low or zero fees alongside functionality such as notifications to business owners and rapid changes to authorisation mandates.
In 2024, CEO Yatin Narsai told ITWeb that growth in card turnover and account activity was outpacing customer growth, indicating that customers were increasingly using Bank Zero as their primary banking relationship.
“Bank Zero’s structural pricing dominance is unmatched in the industry. It ensures mutuality by not charging customers a monthly fee for the privilege of holding their own money,” he said at the time.
A small team founded the financial institution, including Michael Jordaan, chairman of Bank Zero and former CEO of First National Bank (FNB), and Narsai, former head of FNB Retail, alongside Liné Wiid, Lezanne Human, Mo Hassem, Jay Prag and David Longe.
Bank Zero says it expects monthly earnings to remain uneven in the near-term as it moves beyond the break-even milestone.
“Future monthly earnings are expected to be choppy in the immediate short-term, while robust revenue growth is expected in 2027, along with a healthy profit and a surprisingly high return on equity, mostly driven by the large demand in alliance banking, as well as new forex capabilities, which are currently awaiting SARB approval.”
The bank says it has subjected its technology and operating model to extensive stress testing, with results indicating strong capital and operational efficiency.
It expects alliance banking and planned foreign-exchange capabilities to provide additional sources of revenue, although the latter remains subject to South African Reserve Bank approval.
Expanding reach
Bank Zero continues to await regulatory approval for its proposed acquisition by JSE-listed fintech group Lesaka Technologies.
Lesaka has extended the long-stop date for the planned transaction to 31 January 2027, as outstanding regulatory approvals remain to be secured.
The proposed acquisition would bring Bank Zero into Lesaka’s fintech portfolio, subject to the remaining conditions and approvals required to complete the transaction.
Partnerships with fintech firms, retailers and digital platforms are also becoming an increasingly important part of the bank’s growth strategy.
Bank Zero announced its alliance banking offering in April, allowing third-parties to issue card products using its infrastructure. The model is intended to generate deposits and transaction income without Bank Zero having to acquire every customer directly.
The bank says the partnerships provide an additional route to market, while giving participating businesses access to its banking infrastructure.
“Alliance banking is a natural extension to Bank Zero, providing its partners a modern, cost-effective banking platform, while Bank Zero reaches a much larger, previously inaccessible target market.”
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