By Siyanda Mthethwa
JOHANNESBURG (Reuters) -South African discount retailer Pepkor Holdings has received regulatory approval to establish a banking presence, it said on Tuesday, as it expands beyond retail and financial services.
Pepkor said in a statement that it had secured approval from the Prudential Authority in November, enabling it to enter South Africa’s competitive banking sector.
The company said the move is supported by its acquisition of fintech software provider Cloudbadger.
“The platform that we acquired…and the team that comes with that is actually a key ingredient to developing this opportunity,” Group CEO Pieter Erasmus told investors. “So we think that has put us in a very good position.”
Pepkor plans to announce details of its offering and target customers in March.
South African retailers such as Shoprite, which has expanded banking services, and Pick n Pay, which offers in-store banking through Tymebank, are also exploring new revenue streams.
Pepkor will compete in a highly competitive sector dominated by Standard Bank, FirstRand’s First National Bank, Absa, Nedbank and Capitec Bank.
Earlier, Pepkor, which owns the PEP and Ackermans clothing brands, said headline earnings per share (HEPS) from continuing operations rose 14.8% to 161 cents in the year ended September 30, from 140.2 cents a year ago. Normalised HEPS grew 23.4% to 161 cents.
The group’s fintech segment grew by 31.1% to 16.6 billion rand ($960 million), driven by 61.4% growth in financial services and a 13.7% rise in Flash, its informal market platform.
Group revenue climbed 12% to 95.3 billion rand while the clothing and general merchandise business grew 8.9% to 66.9 billion rand. The furniture, appliances and electronics segment increased by 7.2%.
($1 = 17.2927 rand)
(Reporting by Siyanda Mthethwa; Editing by Mrigank Dhaniwala, Kirsten Donovan)
