Discovery Bank is adding 600 new clients a day, more than half of which are new to the broader Discovery Group thereby creating other opportunities to cross-sell its health and other insurance products into the lender’s expanding depositor base.
The bank, which was only launched in July 2019, has also grown its client base to 400,000 so far in 2021 of which 375,000 are primary clients, 31% more than at the beginning of 2021. Discovery Bank also said that total deposits had risen to R9.05bn as of November 2021 while its credit loss ratio had “trended down” to 3.25%, despite its loan advances growing at five times the market’s annual average rate of 2%.
Discovery Bank CEO Hylton Kallner gave the details in a presentation posted on the group’s website after speaking at a JPMorgan conference on Wednesday. The conference was not open to media and Kallner was unable to immediately respond to questions from Business Day.
The digital bank also said it was on track to achieve annual revenues of R1bn and was actively leveraging the Vitality Money behavioural incentives programme to drive “healthy balance sheet growth”. Discovery Bank expects to break even in 2024 when it will probably reach a total client base of between 600,000 and 700,000.
The bank’s break-even projection is premised on its growth rate of 600 new clients a day as well as its current credit loss ratio, net interest revenue and loan-to-deposit ratio trends.
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