South African retailer Pepkor Holdings plans to launch its bank in April 2027, betting on its nationwide retail footprint and growing fintech operations to attract 1.8 million primary banking customers within five years.
The retailer, which is the largest retail operator in Southern Africa by store numbers and processes around two billion transactions annually, plans to leverage its network of more than 6,500 stores and existing financial services ecosystem to drive customer adoption, executives said on Tuesday.
- Pepkor’s banking ambition is backed by strong financial performance in the first half of its 2026 financial year. The company reported a 10.3% increase in headline earnings per share to 93.1 South African cents for the six months ended March 31, 2026, while group revenue rose 13.2% to R54.8 billion.
Pepkor chief commercial officer Garth Napier told investors after the earnings release that the planned bank would combine digital and physical banking services, allowing customers to transact across the retailer’s extensive store network.
Pepkor chief financial officer Riaan Hanekom said the retailer now expects to spend no more than R920 million on the banking project ahead of the planned launch, lower than an earlier R1 billion estimate, subject to regulatory approvals.
The gap in South Africa’s banking sector
Pepkor’s entry into banking comes in a market dominated by established lenders including First National Bank, Standard Bank, Nedbank, Absa Group and Capitec Bank, all of which serve millions of consumers and are widely regarded for their financial stability.
Yet despite the sophistication of South Africa’s banking system, the country continues to grapple with financial exclusion, particularly among rural communities, informal workers and small businesses.
- According to a PayFast report, an estimated 19 million South Africans remain unbanked or underbanked, while more than one million small and medium-sized businesses still operate primarily on cash transactions.
Industry analysts say this creates opportunities for low-cost, digitally driven banking services targeted at consumers underserved by traditional lenders.
Competition has intensified in recent years as digital banks, fintech firms and retailers increasingly target these underbanked segments. Mobile-led banking services have emerged as a key battleground in the sector.
Capitec Bank is currently South Africa’s largest bank by customer numbers, serving about 24.1 million customers, reflecting strong demand for simplified and lower-cost banking products.
Pepkor’s retail customer base offers advantage
Pepkor is expected to rely heavily on its vast retail ecosystem to accelerate customer acquisition for the planned bank.
The retailer owns major clothing brands including PEP and Ackermans, giving it access to millions of shoppers across lower- and middle-income communities.
- The clothing retail segment contributes about 72% of Pepkor’s revenue, while its fintech division already accounts for 15%, underscoring the growing importance of financial services within the group. The remaining 13% comes from furniture, appliances and electronics businesses.
Pepkor has also been expanding aggressively in mobile and device financing services. According to TechCentral, the company’s FoneYam smartphone rental business grew its rental book by 53% over the past year to R2.6 billion.
- FoneYam added 1.3 million new accounts during the reporting period, taking its active customer base to 2.4 million.
- Pepkor’s active SIM card base now exceeds 30 million users, while recurring revenue from the business climbed 13.4% to R1.1 billion.
The retailer said growing smartphone adoption and stronger use of its financial products, including loans and insurance, form part of its strategy to build an integrated consumer ecosystem ahead of the bank launch.
Analysts say Pepkor’s combination of physical stores, fintech operations and extensive customer reach could give it an advantage in cross-selling banking services to existing retail customers, especially in lower-income and underserved communities.