Discovery Bank Applauds Customer Growth But Still Delivers R990 Million Loss


Financial services firm Discovery pointed to positive business performance from its incumbent companies in a report of its annual results for the period ending June 2022 on Wednesday (Sept. 7).

Discovery Bank was singled out in the report for reaching the one million account milestone.

“Despite highly volatile political and economic markets, the group has made excellent progress on its growth strategy, as evidenced by Discovery Bank and the evolution of our global healthcare model, primarily through Amplify Health, our recently announced partnership with AIA in Asia,” said the CEO of Discovery’s Group, Adrian Gore.

“Discovery Bank performed exceptionally well, growing customer base to more than one million accounts, retail deposits up 30% to R10.6 billion and advances up 14% to R4.3 billion,” said Gore.

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However, Discovery Bank posted an operating loss for the fiscal year of R990 million, although it was 10% lower than the prior fiscal year.

The bank continues to grow its current customer base, with 470,220 customers (331,000 in the prior period) and 1,023,790 accounts (up from 649,000 in June 2021), marking an important milestone, the group said.

“New business volumes remained strong, with more than 800 average daily new sales to banks (compared to 500 in June 2021), demonstrating significant progress towards a medium-term target of 1,000 sales per day and 1,000 sales per day. ,000 customers by 2026. bank has also continued to attract high-quality customers, resulting in high average non-interest income (NIR) and a low loan loss ratio of 1.56%.”

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Highlights of the group:

  • New business initiatives grew strongly led by the bank and initiatives within Vitality Group, most notably Amplify Health – putting the group well positioned to return to its long-term target of 10% of operating profit
  • Profit for the year up 70% to R5.479 billion
  • Normalized operating income up 45% to R9.384 billion
  • Normalized total profit increased 71% to R5.816 billion
  • Basic earnings per share (HEPS) rose 74% to 792.4 cents

Discovery’s South African group of companies performed remarkably well, with a strong recovery from Discovery Life and solid performance from Discovery Health and Discovery Invest, Gore said.

Normalized operating income increased 41% to R8 679 million and new business up 15% to R14.257 billion, excluding new initiatives. During the period, Discovery Insure was negatively impacted by severe weather in KZN and an increase in power surge claims, combined with significant inflation on the supply side of motor vehicle repairs and parts.

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Speaking about Discovery’s global expansion, Gore said, “Significant investment has been made in new initiatives in Vitality Health International, with a focus on expanding its global health solutions business and maintaining global leadership in behavioral solutions.

“The largest investment over the period was in the Amplify Health joint venture with AIA, which offers digital health solutions in Asia-Pacific. The company also launched shared value health insurance products, incorporating Vitality, for employer groups operating in multiple African countries outside of South Africa.”

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