South Africa’s newest bank going it alone

Pepkor is weighing plans to abandon a possible partnership with Investec and instead launch a lender on its own, according to a person familiar with the matter.

The retailer, Africa’s largest seller of clothing and mobile phones, had considered teaming up with Investec to expand into financial services.

It’s now mulling a plan to roll out the venture independently, the person said, asking not to be identified because the process is ongoing.

A final decision hasn’t been made and Pepkor is expected to update the market at an investor presentation in Cape Town as early as this month, the person said.

Pepkor declined to comment, while Investec said it was unable to discuss any talks that “may or may not have taken place.” 

Cape Town-based Pepkor has already begun laying the groundwork. In a job posting dated 11 March, it advertised for a banking chief to lead a “fully integrated transactional-banking model” across more than 2,500 PEP stores in South Africa.

The executive will spearhead what the company described as a large-scale strategic initiative requiring an entrepreneurial approach and deep retail-banking expertise.

Pepkor received regulatory approval last year to establish a banking unit and has acquired a financial-technology platform to support the expansion. In December, it appointed former Investec Bank CEO Richard Wainwright as an independent non-executive director.

Pepkor’s fintech revenue rose 31% to R16.6 billion in the year through September, accounting for 17% of total sales.

The move positions Pepkor alongside retailers such as Shoprite, which are leveraging loyalty-program data to expand into banking. About a sixth of South Africans remain unbanked or underserved.