South African retailer Pepkor is preparing to enter the country’s banking industry, adding to a growing shift by retailers toward financial services as they look for steadier income and closer ties with customers.

The company, which owns clothing chains PEP and Ackermans, plans to launch its bank in April 2027.

Pepkor said the business will combine digital banking with in-store services across its nationwide retail network.

The move reflects a broader trend in South Africa, where retailers are expanding into banking, insurance and payment services as consumers increasingly rely on mobile and low-cost financial products.

Traditional banks still dominate the sector, but competition has grown as fintech firms and retailers target millions of underbanked customers.

Pepkor believes its large store footprint and existing customer base could help it gain market share quickly.

The retailer aims to attract 1.8 million primary banking customers within five years of launch.

*Pepkor to launch bank in South Africa as retail finance race heats up*

Retailers chase growth beyond store sales

Pepkor executives said customers will be able to access banking services through more than 6,500 stores nationwide, giving the company one of the country’s largest physical banking networks outside the major lenders.

Chief Commercial Officer Garth Napier said the retailer already handles about 22 million cash-in and cash-out transactions each year, along with roughly 4 million bill payments.

The figures show how financial services have already become a growing part of the company’s business.

The retailer has also expanded its focus on digital services tied to smartphones, credit products and insurance offerings, areas that are becoming increasingly important as consumers search for affordable financial tools.

Banking push comes as earnings rise

Chief Financial Officer Riaan Hanekom said Pepkor now expects to spend less than R920 million ($61.2 million) on the banking project before launch, lower than its earlier estimate of R1 billion.

The final amount will depend on regulatory approvals.

Pepkor announced the banking plans alongside strong interim earnings. Headline earnings per share rose 10.3 percent to 93.1 cents in the six months ended March 31, while group revenue increased 13.2 percent to R54.8 billion($3.4 billion).

The company said growth was supported by acquisitions, solid demand at its core PEP clothing business and continued expansion in financial services, an area many retailers now see as key to long-term growth in a weaker consumer economy.