<\/p>\n
Pepkor, which is in the process of building a bank offering, says it is targeting a total build cost of under R1 billion for the project.<\/p>\n
Group CFO Riaan Hanekom told investors this week that, based on its current forecast, the retailer \u201cwill spend no more than R920 million in total cash flow, that\u2019s opex and capex combined\u201d until it launches the bank.<\/p>\n
He said it is planning to launch the bank on 1 April 2027.<\/p>\n
Read:
Two-pot pension withdrawals bolster Pepkor
Inside Pep\u2019s new R1bn bank, \u2018PlusB\u2019, which launches in 2027<\/p>\n
So far, it has spent R315 million, with the bulk (R224 million) paid for fintech outfit CloudBadger, which it acquired in October 2025.<\/p>\n
Hanekom said it has spent an additional R15 million on capex to integrate CloudBadger into some of its systems, as well as \u201cexternal financial services platforms\u201d. The cumulative operating expenditure for its banking initiative over the last 18 months has been R76 million.<\/p>\n
Regulatory approvals\u00a0<\/p>\n
The group received Section 13 regulatory approval from the Prudential Authority in November 2025, allowing it to establish a bank, with its Section 16 formal application (for operational readiness) submitted on 20 March.<\/p>\n
Aside from the approval of that application, the last remaining regulatory hurdle is permission to accept deposits (Section 17), which it expects to be granted in the fourth quarter.<\/p>\n
Read: FirstRand chair on threat of new entrants, Discovery Bank, and collapsing municipalities<\/p>\n
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OUTsurance previously owned 45% of CloudBadger, which it acquired when it had broader financial services aspirations. It recorded a R9 million loss on the disposal (from which it received R93 million).<\/p>\n
CloudBadger\u2019s core banking platform has been in real use for some time and is believed to still form the backbone of Standard Bank\u2019s operations in eSwatini. (In Pepkor\u2019s numbers, Plus B reported revenue of around R30 million in the six months to 30 March from this legacy contract).<\/p>\n
Chief commercial officer Garth Napier, previously of Old Mutual, reiterated its medium-term targets in terms of customers.<\/p>\n
At its capital markets day at the end of March 2026, it said it aimed to have 1.8 million \u201cprimary banked\u201d customers by 2032.<\/p>\n
Major advantage identified \u2026\u00a0<\/p>\n
He said that, unlike some other banks such as TymeBank and Discovery Bank, which are almost entirely digital, it sees its massive physical footprint as a major advantage.<\/p>\n
Napier said customers will be able to transact across all of the group\u2019s 6 500 stores and that its bank will be a combination of both.<\/p>\n
\u201cIn our banking strategy, we believe it\u2019ll be a combination of digital as well as customers using our physical stores, because of the access we can give them.\u201d<\/p>\n
He highlighted that the group has in the past shared the significant amount of banking transactions that are already being done in its stores.<\/p>\n
Each year, there are already 22 million \u2018cash-in\u2019 and 22 million \u2018cash-out\u2019 transactions being done in its stores, with more than four million bill payments. This, he said, shows that \u201cthe financial activity is already here\u201d \u2013 even \u201cwithout a banking licence\u201d.<\/p>\n
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Not only will it use its store base and traditional digital channels, including a new app, WhatsApp and USSD to enable transactions, it will leverage its Flash informal market platform, with those merchants \u201cservicing the last mile\u201d.<\/p>\n
In the six months to 30 March, the Flash business reported revenue of R4.9 billion.<\/p>\n
This growing network of 176 000 traders will extend the bank\u2019s cash-in and cash-out services, money transfers, bill payments and purchases of value-added services (airtime, electricity) far beyond any traditional financial services footprint.<\/p>\n
Comparison with rivals\u00a0<\/p>\n
Pepkor\u2019s sub-R1 billion build plan pales in comparison with the R2.8 billion that Old Mutual has already ploughed into its OM Bank venture. Of this, R2 billion was dedicated to the core technology build-out.<\/p>\n
Discovery spent around R3 billion on the initial digital infrastructure for Discovery Bank.<\/p>\n
Its modest budget to build the bank, along with \u201csub-linear cost scaling\u201d (where costs won\u2019t increase in line with customer growth), will translate into \u201ca lowest-cost bank in all aspects\u201d, with savings being passed on to customers.<\/p>\n
It expects the bank to start generating earnings in 2030, with cumulative breakeven (in other words, after the \u2018repayment\u2019 of losses) in 2032.<\/p>\n
From that point \u2013 five years in \u2013 it is targeting return on equity of above 30% and sees a total of R8 billion in deposits and R8 billion in loan advances across those 1.8 million customers.<\/p>\n
#Peps #bank #plusb #cost #R920m #build<\/p>\n","protected":false},"excerpt":{"rendered":"
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