Lesaka Technologies, a prominent South African fintech firm, has announced a significant agreement to acquire 100% of the digital lender Bank Zero Mutual Bank for approximately R1.091 billion (US$62 million). This strategic move, which caused Lesaka's share price to jump 17.1% on Friday morning, is set to be settled through a combination of newly issued Lesaka shares and up to R91 million (approximately $5.1 million) in cash. Upon completion, Bank Zero's shareholders, including its founders, will collectively own about a 12% stake in Lesaka's fully diluted shares, underscoring a long-term strategic alignment.

This acquisition is hailed as a transformative event in Lesaka's journey towards building a vertically integrated fintech platform. Lesaka chairman Ali Mazanderani stated that embedding Bank Zero's well-engineered neobank capability into their existing fintech platform will enable them to better serve their consumers, merchants, and enterprise clients. For Bank Zero, CEO Yatin Narsai noted that joining forces with Lesaka will accelerate their mission to remove friction, lower costs, and challenge legacy banking norms at a greater scale, reaching more customers faster. This integration is expected to unlock new revenue streams, improve capital efficiency, and create significant synergies across the combined ecosystem.

Founded in 2018 by banking veterans Michael Jordaan and Yatin Narsai, Bank Zero operates on a modern, app-driven technology platform with a distinctive zero-fee banking model, offering both retail and commercial banking services. As of April 2025, Bank Zero had accumulated a deposit base exceeding R400 million and served over 40,000 funded accounts across South Africa. Its innovative approach includes patented card technology designed to enhance security and user control. While Bank Zero excelled in design and compliance, Lesaka brings deep distribution channels across consumer and merchant segments, creating a powerful synergy.

A critical aspect of the deal is the continuity of leadership. Michael Jordaan, Bank Zero's Chairman and former FNB CEO, will join the Lesaka Board of Directors, while Yatin Narsai, Bank Zero’s CEO and former CEO of FNB’s Retail Bank, will continue in his role. The broader Bank Zero leadership team will also remain in place, ensuring operational consistency and a seamless integration process. This commitment to retaining key talent reinforces the strategic partnership and shared vision for the future.

Financially, the transaction is expected to significantly benefit Lesaka. It aims to support a more optimized balance sheet by allowing the group to finance existing and future lending growth through customer deposits, thereby driving stronger lending unit economics. Furthermore, the acquisition is projected to reduce Lesaka's reliance on bank debt in its Consumer and Merchant divisions, potentially leading to a reduction in gross debt of over R1 billion post-completion. Lesaka anticipates the transaction to be accretive to shareholders, with Bank Zero expected to achieve profitability in the fiscal year following the deal's completion. The transaction remains subject to customary closing conditions and crucial regulatory approvals from authorities such as the South African Reserve Bank’s Prudential Authority, the Competition Commission, and Exchange Control authorities. Further financial details are expected to be published when Lesaka releases its annual results around September 4, 2025.