"This is a green-fields investment," says Head of Africa Operations at FNB, John Macaskill.
FNB has received the go-ahead from the Central Bank of Lesotho and the South African Reserve Bank to open a new bank.
"We are able to start with a clean slate and acquire quality business. In addition, Lesotho is a CMA country - sharing a common monetary platform with South Africa, Swaziland and Namibia - and FNB will now operate in all CMA countries".
"The new operation will add capacity to the economy and will contribute to upgrading financial services in Lesotho."
"We are able to rapidly transfer new technologies and infrastructure to establish the operation. FNB has done this before with considerable success in Swaziland. In this case we took over a small banking operation a few years ago and introduced upgraded technologies," said Macaskill.
FNB Lesotho will offer retail and corporate banking facilities; this will include an ATM network and Internet Banking. The bank will have a treasury and trade finance division, and will offer WesBank's finance operations once the bank is operational.
FNB's Africa operations contributed 6%, at attributable level, to FirstRand's profits for the previous reporting period.
FNB expects its Lesotho operation to be profitable within three years, it said in a statement.