TymeBank becomes Africa’s first digital bank to reach profitability

TymeBank is now the first digital bank in Africa to break-even, less than five years since launching in 2019.

The bank recently announced it had reached its first month of profitability in December, making it one of the fastest growing digital banks globally.

Tyme Bank CEO, Coenraad Jonker hailed the milestone.

“We are extremely proud of our achievement, particularly when you consider that globally, less than half of the top 100 digital banks are profitable,” Jonker said.

Meanwhile, a study by global consultancy firm Simon-Kucher revealed that less than 5% of neobanks worldwide have reached profitability.

“Having achieved our first month of profitable operations in a significantly shorter time-frame is a South African success story that our 8.5 million customers can share with pride,” said Jonker.

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Thriving in a new market

As the first digital bank in South Africa, TymeBank’s had to jump some hoops in an untapped market, introducing services completely new to most South Africans.

TymeBank’s primary objective remains to provide clients with affordable, accessible and quality banking services.

“This purpose has clearly resonated with consumers given our rapid growth, high levels of customer satisfaction and the successful introduction of a wide range of products and services,” Jonker said.

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Strategic moves

TymeBank’s achievement came as a result of a number of strategic moves to reach millions of customers.

Here’s what the bank has successfully managed to pull off.

• Combining digital channels with in-store kiosks at major retailers, consistently acquiring 150,000 customers each month;
• Merchant Cash Advance – this enabled the bank to grow its lending portfolio by 30% year-on-year. Tyme Bank now finances 50,000 Small Medium Enterprises (SMEs) countrywide;
• Strategic partnerships with Pick n Pay, Boxer, The Foschini Group (TFG) and Zion Christian Church (ZCC);
• Consistent innovation – some notable strides include a quick process of opening a bank in under five minutes and becoming the most affordable banking offering in South Africa;
• Capital power – evidenced by the bank’s successful capital raise last year amid a tough economy.

Additionally, TymeBank’s interest-free Grant Advance for social grant recipients and the launch of its buy-now-pay-later offering have been groundbreaking.

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Aiming for the top spot

TymeBank’s next goal is to become one of the top three retail banks in the country within the next few years.

“We believe that we are now perfectly aligned with our goal of becoming one of the top three retail banks in the country,” said Jonker.

He said the “ambitious” goal would require strategic focus on all areas of the business.

“We are confident that our proven track record of success positions us well to achieve this audacious aim in the next few years,” Jonker said.

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‘Unrelenting innovation’

Patrice Motsepe, founder and chairman of African Rainbow Capital (ARC), TymeBank’s major shareholder welcomed the milestone.

Motsepe attributed the bank’s achievement to dedicated efforts, strategic investments and an unwavering commitment to providing quality banking to South Africans.

“Having attracted more than 8.5 million customers, TymeBank’s unique proposition continues to digitally disrupt and transform the banking sector,” Motsepe said.

“As the business evolves, we are seeing it gradually appeal to more affluent consumers who appreciate this unrelenting innovation, customer-centric transparency and accessibility,” he added.