Lesaka Technologies saw its share price jump by 17.1% on Friday morning after announcing a landmark agreement to acquire 100% of South African digital bank, Bank Zero Mutual Bank, in a deal valued at R1.091 billion. The R1.1 billion ($61.4 million) acquisition—pending regulatory approval—signals a pivotal evolution for Lesaka, transitioning the company from a fintech services provider to a fully licensed digital banking institution.
The acquisition will be financed through a mix of newly issued Lesaka shares and up to R91 million in cash. Upon completion, Bank Zero’s shareholders—including its chairman Michael Jordaan and CEO Yatin Narsai—will collectively own approximately 12% of Lesaka’s outstanding shares. Based on Lesaka’s share price of R88.26 at the time of the announcement, this equity stake is valued at around R1 billion. However, shares were trading at R81.99 on Friday morning.
A Strategic Leap for Lesaka
Lesaka’s chairman, Ali Mazanderani, described the acquisition as a “transformative event” for the company. “This deal allows us to embed a trusted, well-engineered neobank into our fintech ecosystem, enhancing our ability to serve consumers, merchants, and enterprise clients,” he said.
Bank Zero CEO Yatin Narsai echoed the sentiment, emphasizing the shared vision between the two companies. “Our mission has always been to use technology to eliminate friction, reduce costs, and challenge outdated banking models. Partnering with Lesaka enables us to scale that mission rapidly and unlock new revenue streams, improve capital efficiency, and create synergies across our platforms.”
Regulatory Approvals Pending
The transaction is still subject to regulatory approvals, including clearance from South Africa’s Prudential Authority and the Competition Commission. Founded in 2018, Bank Zero operates on a modern, app-based platform and is known for its zero-fee banking model. It offers both retail and commercial banking services. As of April 2025, the bank had over 40,000 funded accounts and a deposit base exceeding R400 million.
Unlocking Synergies and Financial Transformation
Mazanderani noted that the integration of Bank Zero’s digital banking infrastructure and operational banking license with Lesaka’s fintech and distribution capabilities would significantly enhance the company’s service offerings. This includes:
- Providing full-service banking to Lesaka’s existing customer base
- Accelerating innovation across its Consumer, Merchant, and Enterprise divisions
- Improving capital efficiency and reducing reliance on external bank debt
- Enabling a more optimized balance sheet and stronger lending economics
Lesaka anticipates that the acquisition will allow it to finance the growth of its lending operations through customer deposits, rather than through more expensive bank debt. This shift could result in a debt reduction of over R1 billion.
Financial Outlook and Shareholder Value
The company expects the transaction to be accretive to shareholders, with Bank Zero projected to become profitable in the fiscal year following the deal’s completion. More detailed financial guidance will be provided when Lesaka releases its annual results, expected around September 4, 2025.
In its most recent quarterly report (Q3 ending March 31), Lesaka posted revenue of R2.5 billion—within its guidance range but slightly below the R2.6 billion reported in the same quarter of 2024. Operating income fell to R10.9 million from R15 million a year earlier, largely due to R42.3 million in one-off transaction costs, compared to R17.1 million in the prior year. The company also reported a net loss of R404.3 million, driven by a R310.6 million non-operating charge related to the fair value adjustment of a non-core asset. This compares to a net loss of R4 million in Q3 2024.
