JOHANNESBERG, Apr 1 – Pepkor Holdings Ltd. is preparing to roll out a standalone digital bank in South Africa by 2027, as the retailer steps up its expansion into financial services to serve a largely underbanked customer base.
The Cape Town-based group has appointed Merwe Scholtz to lead the initiative, building on its existing credit and mobile services business.
The move follows earlier indications that the company was considering taking deposits to complement its lending operations, effectively creating a full-service banking platform.
Pepkor plans to leverage its network of more than 6,500 stores to support the bank’s rollout, combining physical reach with digital infrastructure.
The company estimates the build will cost less than 1 billion rand, or about $58 million, while targeting a return on equity above 30% within five years.
Pepkor’s push comes as retailers increasingly move into financial services, seeking to capture more value from existing customer relationships.
The company already processes over 2 million money transfers and more than 22 million cash withdrawals, alongside issuing around 65,000 loans.
Growth in its fintech division has been notable. Revenue from the segment rose 31% to 16.6 billion rand in the year to September, accounting for 17% of total group sales.
Pepkor received regulatory approval to establish a banking unit in 2024 and has since acquired a financial technology platform to support the expansion.
An independent advisory board, including former Investec CEO Richard Wainwright, has also been set up to oversee the new lender.
