Pepkor has announced plans to launch a fully licensed bank in South Africa by April 2027, marking a major expansion from retail into financial services as competition intensifies across the country’s banking sector.
The group, which owns major retail brands including PEP, Ackermans and OK Furniture, said the new bank will initially operate under the codename “plusb” and is expected to target around 1.8 million primary banking customers within five years of launch.
Pepkor has already received conditional approval from South Africa’s Prudential Authority and has submitted the required regulatory application under Section 16 of the country’s banking legislation, moving it closer to full licensing.
The planned bank will rely heavily on Pepkor’s extensive physical footprint of more than 6,500 stores across southern Africa, which executives say will provide a key competitive advantage in reaching low income and underserved customers.
The strategy combines digital banking services with in store access points, allowing customers to open accounts, access loans and carry out transactions through both mobile platforms and retail outlets. The hybrid model is designed to serve consumers who may not fully rely on traditional banking channels.
The move reflects a wider transformation in South Africa’s financial sector, where established lenders such as Standard Bank, FirstRand, Absa Group and Nedbank are facing increasing competition from fintech companies and non traditional entrants targeting lower income segments with mobile first financial services.
Pepkor’s entry into banking is also being driven by the rapid growth of its existing financial services operations. The company already processes about 22 million cash in and cash out transactions annually and handles roughly four million bill payments through its retail network, showing how embedded financial activity already is within its ecosystem.
The retailer’s fintech portfolio has expanded significantly in recent years. Its smartphone rental service, FoneYam, has grown to 2.4 million active customers, while its lending arm, Capfin, has increased its loan book to R5.3 billion, equivalent to about $324 million. Its insurance division, Abacus Insurance, has also seen strong growth, with revenue rising sharply and coverage extending to more than 1.3 million lives.
Overall, Pepkor’s financial services division has become one of the company’s fastest growing segments, with revenue rising to around R3 billion, or roughly $183 million, and operating profit increasing by more than 60 percent in its latest reporting period.
Executives say the planned bank is expected to cost less than R920 million, approximately $56 million, and could generate a return on equity above 30 percent within five years if rollout targets are achieved.
The company’s leadership believes its advantage lies in combining its large retail footprint with data driven financial services, enabling it to reach customers who are often excluded from formal banking systems.
South Africa’s banking sector is already one of the most developed in Africa, but it remains concentrated among a small number of dominant players. At the same time, the rise of digital platforms and mobile financial services is reshaping how consumers interact with money, particularly in lower income communities.
Pepkor’s expansion into banking is therefore seen as part of a broader continental trend where retailers, telecom operators and fintech companies are increasingly moving into financial services to capture new revenue streams and deepen customer engagement.
If successful, the initiative could become one of the most significant retail led banking experiments in Africa, testing whether large consumer networks can effectively challenge traditional banking models in both scale and profitability.
