Pepkor aims to marshal its unrivalled retail footprint of more than 5,000 stores in the country, servicing more than 30-million clients, to launch a full assault on South Africa’s banking sector with an audacious foray into the crowded banking sector.
Pepkor’s retail network is bigger than the branch networks of Capitec, Standard Bank, Absa and Nedbank combined.
Pepkor also has more than 10-million customers across its digital ecosystem, giving it more options in the digitally dominated banking sector.
This comes as the group, the country’s largest clothing retailer, looks to replicate its success in the retail banking sector.
To achieve its goals, the group on Tuesday said it was also on the prowl for fintech acquisitions to add muscle to its banking propositions.
The banking sector was last disrupted meaningfully by Capitec, which has grown its client base to 25-million and market value to R460bn — becoming the country’s second most valuable bank after FirstRand.
Capitec is also South Africa’s largest digital bank with 12-million clients on its digital platforms.
It is Capitec’s success, considered impossible three decades ago, that has emboldened new entrants to compete for a piece of the mass market, which the likes of TymeBank and Old Mutual banking proposition OM Bank are also vying for.
Garth Napier, whom Pepkor prised away from Old Mutual, said Pepkor had all the attributes to earn the right to win in the banking sector.
Napier, Pepkor’s chief commercial officer, said the group had already made strides in meeting customers’ financial services needs.
“We already process over 2-million money transfers per month, 4-million bill payments, 22-million cash withdrawals and another 22-million cash deposits. We also process 65,000 personal loans per month,” Napier said on Tuesday.
“We believe we have an opportunity to make banking more accessible and affordable for our customers. We already meet many of our customers’ banking needs. We have demonstrated an ability to acquire customers with over 32-million known customers,” he said.
“We believe that by leveraging our trusted brands, retail footprint, good customer service and low cost of doing business, we can meet our customers for accessible banking.”
The group’s banking ambitions received a major boost after the Reserve Bank’s Prudential Authority authorised the group to establish a banking presence, a key step in the regulatory process for an entity seeking to operate as a deposit-taking institution in South Africa’s financial services sector.
Pepkor has already put building blocks in place to launch an assault on the banking sector, which has more than R10-trillion in assets.
The sector is highly profitable; in the 12 months to December 2024 banks generated R140bn in profit.
At least 91% of South African adults have been formally included in its financial system, with only about 2.9-million still excluded. Of those included, 81% have bank accounts, according to the National Treasury draft consultation paper, “An Inclusive Financial Sector for All”.
According to the latest Banking Association of South Africa annual report, about 40-million South Africans have bank accounts.
SA has seen the entry of several banks in the past six years, including TymeBank, Discovery Bank and Bank Zero.
Old Mutual has also re-entered the space after exiting its Nedbank stake seven years ago, returning to market with OM Bank, which is going after the mass market.
TymeBank, backed by Patrice Motsepe, entered the market in 2019 and has grown to 11-million customers and established a strong partnership with Sanlam.
Pepkor, the remaining remnant of the Steinhoff implosion, said on Tuesday it was ready to enter the banking space.
“Pepkor plans to establish a banking presence in SA, combining its established financial services capability, retail footprint, ability to acquire customers, and brand equity as a platform for expansion,” the group said.
“Cloudbadger, a South Africa-based fintech software provider offering a modern financial services platform, was acquired on October 1 2025 (strategic acquisition).”
CloudBadger provides back-end services in six core areas: deposits, lending, investments and savings, payments and collections, retail and merchant networks and security and authentication systems.
The group, worth R96bn on the JSE, said it would open 250-300 new stores in the 2026 financial year, extending its physical presence and improving customer access.
“Targeted mergers and acquisitions will continue to strengthen the group’s fintech offerings and diversify its geographic footprint.”
Pepkor’s strategy is to convert its physical retail reach into a digital, transactional ecosystem across retail, financial services, telecommunications, fintech and the informal market.
The group’s results for the year ended in September, a period in which it reported a record profit of R11.1bn, show the group is also well placed to disrupt the informal market — a segment Capitec has set its eyes on for growing its fledgling business banking proposition.
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