TymeBank makes first profit

TymeBank has announced that it reached its first month of profitability in December 2023, less than five years since launching in February 2019.

This makes it the first digital bank to break even in South Africa and on the continent, it said.

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

“In fact, a recent study stated that less than 5% of all neobanks worldwide had reached profitability.”

Of those that are in the black, most have taken a lot longer to become profitable; notable examples being Latin America’s Nubank and London-based Monzo, which took eight and seven years, respectively.

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

Jonker said that as the country’s first digital bank, they overcame numerous challenges as they broke new ground in the market.

“Through it, our team has remained focused and committed to our mission of providing South Africans with affordable, accessible, and quality banking services,” he continued.

“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.”

TymeBank attributed its success to several factors:

• Its unique model of combining digital channels with in-store kiosks at major retailers, consistently acquiring ~150,000 customers each month
• The long-standing, strategic relationships with Pick n Pay and Boxer, The Foschini Group (TFG) and the Zion Christian Church (ZCC)
• The rapid ~30% growth of its lending portfolio year-on-year, driven by Merchant Cash Advance, which is now financing more than 50,000 SMEs across the country
• The continued confidence of its shareholders, as evidenced by the Tyme Group’s successful capital raise last year, despite a tepid economic landscape
• The ability to open a bank account in under 5 minutes
• South Africa’s leading fixed deposit savings rate of 11%
• The launch of interest-free Grant Advance for social grant recipients
• The launch of healthcare insurance (TymeHealth) in collaboration with the National Healthcare Group — a banking first in South Africa
• The launch of its buy-now-pay-later product, MoreTyme

Dr Patrice Motsepe, founder and chairman of major shareholder African Rainbow Capital (ARC) said TymeBank’s landmark achievement comes after years of dedicated effort, strategic investments, and an unwavering commitment to the business’s core mission to offer quality banking services to all South Africans.

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

“And as the business evolves, we are seeing it gradually appeal to more affluent consumers who appreciate its unrelenting innovation, customer-centric transparency and accessibility.”