TymeBank, a black-owned digital bank, celebrated its first month of profitability in December, less than five years since its inception. CEO Coenraad Jonker announced this milestone, highlighting the bank’s rapid growth in customer numbers and ambitious plans to secure a spot among the top three retail banks in South Africa within the next three years.

Growth Trajectory and Ambitious Targets:
Since its launch in February 2019, TymeBank has experienced steady growth, amassing an impressive 8.5 million customers locally. Jonker revealed that the bank aims to add a “cheeky” target of being among the top three retail banks in South Africa within the next three years. In an interview with Business Report, he stated, “In good months we can get up to 500,000 new customers, 200,000 in South Africa and 300,000 in the Philippines.”

To achieve this ambitious goal, TymeBank plans to expand further into South-East Asia in the second quarter of 2024. The introduction of the Merchant Cash Advance product in Vietnam is set to spearhead this expansion, building on the success of the product, which saw a 30% growth in South Africa last year, benefiting around 50,000 small and medium-sized businesses.

Jonker emphasized that TymeBank’s achievement of breaking even in less than five years positions it as one of the fastest-growing digital banks globally. A recent study revealed that less than 5% of neobanks worldwide have reached profitability, with most taking significantly longer to achieve this milestone. Jonker cited examples like Nubank in Latin America and Monzo in London, which took eight and seven years, respectively, to become profitable.

Strategic Focus and Key Metrics:
TymeBank’s three-year target encompasses several key metrics, including aiming to be in the top three retail banks in customer service, achieving a return on equity of 30%, securing a top-three position in terms of customer numbers, compound annual growth, and efficiency with a cost-to-income ratio of 40%.

While TymeBank currently has 8.5 million customers, it acknowledges that it has a way to go to compete with larger banks in South Africa. For perspective, Capitec Bank boasts 21 million customers, Standard Bank approximately 18.2 million, and Absa and FNB each with about 11.5 million customers.

Factors Contributing to TymeBank’s Success:
Jonker attributes TymeBank’s success to a combination of factors, including the integration of digital channels with in-store kiosks at retailers, long-standing partnerships with entities like Pick n Pay, Boxer, The Foschini Group, and Zion Christian Church. He also highlighted the rapid growth of the bank’s lending portfolio, shareholder confidence, and innovations such as the most affordable banking offering in South Africa, coupled with the ability to open a bank account in under 5 minutes.

TymeBank’s anchor shareholder, African Rainbow Capital (ARC), plays a significant role in the bank’s success. Other stakeholders include Apis Growth Fund II, Tencent, British International Investment, the Gokongwei Group, the Tyme Management Investment Vehicle, Norrsken22, and the Ethos AI Fund.

Shareholder Perspective and Future Outlook:
Dr. Patrice Motsepe, founder and chairman of ARC, expressed his confidence in TymeBank’s ability to disrupt and transform the banking sector digitally. Motsepe noted the bank’s appeal to a growing segment of more affluent consumers who appreciate its innovation, customer-centric transparency, and accessibility.

Jonker expressed confidence in TymeBank’s ability to meet its three-year goals, stating, “This ambitious target is our next measurable benchmark for success, one that will require strategic focus across all areas of our business.”

TymeBank’s achievement of profitability in less than five years reflects its rapid ascent in the digital banking sector. As the first black-owned digital bank in South Africa and the continent, TymeBank’s unique blend of innovation, strategic partnerships, and customer-centric practices positions it as a formidable player in the industry. With ambitious expansion plans into South-East Asia and a clear focus on key metrics, TymeBank is poised to continue its disruptive journey in the global banking arena.