Pepkor Holdings Ltd. hired Merwe Scholtz to head its new banking initiative as Africa’s largest seller of clothing and mobile phones prepares to operate an independent lender from next year.
The Cape Town-based company already sells smartphones and offers credit to customers — adding deposits is the final step needed for full-service banking, it said in an investor presentation Tuesday.
This confirmed earlier Bloomberg reports that the retailer was weighing plans to launch a lender on its own.
With about a sixth of South Africans unbanked or underserved, the move positions Pepkor alongside retailers that are leveraging loyalty-program data to expand into banking, such as Shoprite Holdings Ltd.
Pepkor plans to use its more than 6,500 stores for the digital bank, with a total build cost target of less than R1 billion and a return-on-equity target of more than 30% from the lender’s fifth year.
The group has over 2,500 branches in South Africa alone. No bank has entered the local market with all these assets in place, it said.
An independent advisory board will keep the bank accountable and is already largely in place, it said.
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 Chief Executive Officer 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.
