By Luvolwethu Ngani
Pepkor Holdings has secured regulatory approval to launch its own banking venture, marking a major step in the retailer’s push beyond traditional discount retail and into financial services. The Prudential Authority’s green light, received in November, clears the way for Pepkor to enter South Africa’s highly competitive banking sector.
The move builds on Pepkor’s acquisition of fintech software provider Cloudbadger and follows a broader retail trend in which big chains are expanding into banking. Shoprite has rolled out its own banking services, while Pick n Pay offers in-store banking through TymeBank.
Pepkor’s banking ambitions come on the back of a strong set of results. For the year ended 30 September, headline earnings per share (HEPS) from continuing operations rose by 14.8% to 161 cents, up from 140.2 cents a year earlier. Normalised HEPS increased by 23.4% to 161 cents.
The group’s fintech segment has been a key growth engine, rising 31.1% to R16.6 billion. This was driven by a 61.4% increase in financial services and a 13.7% rise in Flash, Pepkor’s informal market platform. Overall group revenue climbed 12% to R95.3 billion, with the clothing and general merchandise division growing 8.9% to R66.9 billion.
“The platform that we acquire, and the team that comes with that, is actually a key ingredient to developing this opportunity,” said Pepkor Group CEO Pieter Erasmus in a recent investor briefing. “So we think that has put us in a very good position.” Pepkor is expected to reveal more details about its banking products and target customers in March 2026.
Pepkor will be entering a market dominated by Standard Bank, FirstRand’s First National Bank, Absa, Nedbank and Capitec. However, analysts say its extensive store footprint and long-standing relationships with lower- to middle-income consumers could give it an edge in reaching underbanked customers.
“Pepkor’s entry into banking is a natural progression, given its existing financial services offerings and customer relationships,” noted one industry observer.
The company’s success will depend on how effectively it can use its brand, distribution network and fintech capabilities to attract deposits and build a sustainable loan book. With its fintech arm already driving double-digit growth, Pepkor is positioning itself to challenge established players and reshape parts of South Africa’s retail banking landscape.
