TymeBank on track to hit 10 million customers in the next quarter

TymeBank, arguably the fastest-growing bank in South Africa, expects to hit the 10 million customer mark in the next quarter, having already reached 9.5 million customers by the end of June.

The growth trajectory history aside, the goal is likely in light of Sanlam revealing that it plans to make banking services available to its clients via TymeBank.

Read more: Sanlam plans to leverage TymeBank’s technology platform for its personal loans business

Earlier this month, TymeBank received a huge vote of confidence from Sanlam, which has restructured its portfolio in African Rainbow Capital (ARC) so that it will have a 25% stake in ARC Financial Services Holdings (FSH) — including its interest in Tyme Group.

In its recently released annual financial statements for the year to the end of June 2024, ARC management said in addition to further cementing the symbiotic relationship between the company and Sanlam the transaction would allow ARC to continue to benefit from the high-growth investments in ARC FSH while sustainably reducing the demands on capital to fund their growth.

The R1.3-billion cash ARC Investments receives from the Sanlam/ARC FSH transaction will pay off some debt, fulfil obligations and improve available cash resources.

The incoming chief executive of TymeBank, Karl Westvig, who takes office at the beginning of October, said the Philippines-based GoTyme attracted a record 3.6 million customers within 18 months of its launch. The growth trajectory of the model is strong, with activity rates exceeding those of South Africa and deposits growing faster than anticipated.

GoTyme is ranked #6 in the Philippines in terms of EFT transfer and QR payment volumes. In June, it acquired SAVii, a payroll lender in the Philippines, to leverage the growing deposit base. The Philippines arm of the bank is expected to reach profitability towards the end of next year.

In Vietnam, the third country in the expansion plan, the merchant cash advance product is being piloted as the company progresses through the contracting stages with in-country partners.

Tyme Global has announced that it will enter Indonesia before the end of 2024.

TymeBank in SA

Over the year to the end of June, TymeBank deposits increased by 59% to R6.5-billion and merchant credit advances rose steadily to about R1.8-billion. Management noted that the operational leverage provided by technology was clear — net operating income tripled year-on-year while costs increased by 10%.

TymeBank reached break-even in December 2023, and sustained profitability is expected in the coming months.

Commenting on the future of banking in South Africa, Westvig said there was a resurgence, with several challenger banks driven by technology.

“So now we can have cloud-based platforms, as opposed to having to invest in major mainframes like we used to as banks. We have mobile banking, which is much easier than the traditional branch-based banking.

“I think we’ll see a shift, but [banking] is a regulated space, so you’ve got to put infrastructure in place to protect depositors’ funds, and you’re going to have oversight from the Prudential Authority — so banks need that balance between being nimble and being responsible,” he told Daily Maverick.

Stats box — TymeBank customers 

• 55% of savings customers are female;


• 62% are under 35 and 83% are under 45;


• Most savings account holders are between 26 and 35;


• The number of savings customers increased by 35% over the past year; and


• One in four of the persistently active customers has a savings account. DM