The South African retailer with 6,657 stores that has quietly been building a banking giant

Pepkor is only one step away from becoming officially registered as a bank, which will build on the retailer’s already extensive capability in financial services.

Aided by its massive network of stores – the most in Southern Africa – Pepkor believes it has the ideal platform for expansion into banking.

The retailer’s plans to launch its banking offering were detailed in its interim results for the six months through March 2026, which were released on Tuesday, 26 May.

These results revealed a bumper performance from Pepkor, which owns well-known brands like PEP, Ackermans, Legit, Tekkie Town, Rochester, Incredible Connection, and HiFi Corp.

Pepkor’s revenue grew by 13.2% to R54.85 billion, largely derived from its retail segment, which contributed the lion’s share of R50.39 billion.

Pepkor reported a profit of R3.36 billion for the six-month period, up 10% from the previous half-year.

Its basic earnings per share, including both continuing and discontinued operations, rose by 9.4% to 90.9 cents per share. Total headline earnings per share rose by 7.71% to 90.8 cents.

The group also expanded its store network significantly over the six-month period, opening 89 new stores and adding another 541 through acquisitions, bringing its footprint to 6,657 stores.

From a segmental perspective, Pepkor’s divisions had no laggards, with all segments showing strong growth.

Within the group’s retail platform, clothing and general merchandise saw revenue up 11.6% to R39.2 billion and operating profit up 3.6% to R4.7 billion.

The furniture, appliance, and electronics segment saw revenue rise by 14.4% to R7.8 billion, with operating profit up 1% to R391 million.

Pepkor’s informal market platform, driven by fintech business Flash, saw revenue grow by 10.4% to R4.9 billion and operating profit up 23.5% to R562 million.

The standout segment for Pepkor in these results was its financial services business, which grew revenue by 41.6% to R3 billion and operating profit up 63.4% to R691 million.

Pepkor’s financial services business has boomed in recent years, providing the retailer with a strong base from which to launch its banking offering.

Pepkor’s hidden financial services giant

Prior to 2026, Pepkor always reported its financial services performance under its FinTech segment, alongside its retail credit books like Tenacity and Connect.

However, as the retailer gears up to make financial services a more substantial part of its business, these segments were realigned, giving investors a better view of the division’s standalone performance.

Thus, the FinTech segment was disaggregated into two new segments – Financial Services and the Informal Market Platform.

Now, investors can see that Pepkor has been building an overlooked Financial Services giant, currently consisting of three business segments that have already shown strong growth potential: FoneYam, Capfin, and Abacus.

FoneYam is Pepkor’s cellular rental business, which launched in 2024 and already reported 200,000 active rentals by the end of that year. It breached 1.5 million active customers in 2025.

Now, in 2026, FoneYam reported 2.4 million active accounts, a 32% increase that drove the company’s cellular rental book to R2.6 billion.

Next is Capfin, Pepkor’s unsecured lending platform. This business underwent a restructuring in 2021 that saw its accounts be reduced to 214,000, with a R1.9 billion credit book.

Since then, this business has shown consistent growth, and by 2026, its active loan base reached 378,000 loans, pushing the gross credit book up to R5.3 billion.

Abacus is Pepkor’s insurance business, initially having provided basic insurance products. However, in the years since its launch, the business has expanded its offerings, aided by Pepkor’s extensive retail footprint and wildly popular PAXI delivery service.

By 2025, Abacus was covering 3.3 million PAXI parcels and providing insurance for FoneYam devices.

This growth is showing through in the business’s finances, with Abacus reporting revenue of R718 million for the first half of 2026, more than double the year prior. 

In this period, the division sold 322,000 funeral cover policies, extending cover to over 1.3 million lives.

Pepkor’s informal market platform, driven by its Flash business, is also not to be overlooked.

Flash provides digitised cash and financial solutions to informal traders, tapping into South Africa’s high-potential yet largely hidden informal economy that has an estimated value of R1 trillion.

Flash temporarily saw its revenue growth slow in 2022 and 2023 due to deliberate product mix changes, but bounced back in the years that followed.

By 2026, Flash’s network supported 176,000 traders, with total throughput increasing by 20.3% to R34.7 billion.

Pepkor’s operating profit from its now standalone Informal Market Platform reached R562 million in the first half of 2026, up 23.5% from the prior half-year.

Now, with these growing businesses and an overall strong financial services segment, Pepkor is looking to take the next step – launching a bank.

Building a bank

Pepkor’s yet-to-launch banking offering will be built from its +more loyalty and data programme, which was launched in 2024.

By 2025, this programme had nearly 10 million members. Pepkor’s latest results for H1 2026 showed that membership has now grown to 17 million members.

To capitalise on this growth, its massive customer base, and proven financial services capabilities, Pepkor is now looking to launch its own standalone bank.

Much of the groundwork to launch banking services has already been laid. The group has received regulatory approval from the Prudential Authority to establish a bank in South Africa.

Pepkor also acquired CloudBadger Technologies, a South Africa-based team and financial services platform, on 1 October 2025.

In March 2026, the group submitted its section 16 application, which, once approved, will enable it to become officially registered as a bank.

That same month, the company announced that it had appointed Merwe Scholtz to head its new banking initiative.