Pepkor is preparing to enter South Africa’s competitive financial services sector, with plans to launch a retail focused bank in April 2027 that will lean heavily on its vast national store network to scale quickly.
Executives say the new venture aims to attract 1.8 million primary banking customers within five years, positioning the discount retailer as a serious challenger in a market long dominated by established lenders.
The strategy reflects a broader shift among retailers in South Africa, where companies are increasingly expanding into financial services to diversify income streams. Banking products offer more stable, higher margin returns than traditional retail and encourage more frequent customer engagement, particularly in lower income segments.
Pepkor’s approach is built around integration rather than disruption. The bank will combine digital capabilities with physical access, allowing customers to transact across more than 6,500 stores nationwide. That hybrid model is designed to appeal to underbanked consumers who still rely heavily on cash and in person services, even as mobile usage continues to rise.
According to Chief Commercial Officer Garth Napier, the retailer already has a significant footprint in financial transactions. Pepkor processes around 22 million cash in and cash out transactions each year, along with 4 million bill payments, giving it a ready made platform from which to expand into full scale banking.
The move comes as competition in the sector intensifies. South Africa’s banking industry has traditionally been controlled by a handful of large institutions, but digital banks and non traditional players are steadily reshaping the landscape. Low cost, mobile led services have become a key battleground, particularly among younger and lower income customers.
Pepkor’s leadership believes its ecosystem, built around retail, credit, insurance and now banking, can create a more seamless customer experience. The company has been investing in this model alongside rising smartphone adoption and growing demand for accessible financial products.
Chief Financial Officer Riaan Hanekom said the group expects to spend up to 920 million rand on the bank’s development, slightly below its earlier estimate of 1 billion rand. The final figure will depend on regulatory approvals ahead of the planned launch.
The announcement came alongside strong interim results, with headline earnings per share rising 10.3% to 93.1 cents in the six months to March. Revenue increased 13.2% to 54.8 billion rand, supported by acquisitions, solid performance from its core PEP clothing chain and continued growth in financial services.
Pepkor, which also owns Ackermans, is betting that its deep reach into everyday consumers will give it an edge in a crowded market. If successful, the venture could signal a more profound shift in how financial services are delivered in South Africa, with retail networks becoming as important as traditional bank branches.
For now, much will depend on execution. Building trust, navigating regulation and competing on cost will be critical. But the direction is clear. The boundary between retail and banking is becoming increasingly blurred, and Pepkor intends to be at the centre of that change.
