Discovery Bank’s new home loan book has quickly raced to about R2bn, a year after it was taken to market, laying a firm foundation for the lender to disrupt the market.
This as the six-year-old bank forges ahead with its target to scale the lender, with an ambition to achieve 2-million clients and R3bn in profits by the 2029 financial year.
“Discovery Bank reached monthly break-even at the end of the first half and generated its first profitable period during the second half of the financial year, ahead of plan,” said Adrian Gore, Discovery group CEO.
“Discovery Bank’s total client base grew 30% to June 2025, reaching 1,400 daily sales in June. Noninterest revenue increased by 32%, driven by the growth in clients, as well as increased engagement levels and product take-up, driving up the resulting fee income per client for each cohort.”
Discovery Bank still has a long way to go to win over its clients who have loans with rival banks. The lender’s client base of nearly R300bn in home loan balances with other banks provides it with a big base from which to get clients to switch their loans.
The fledgling bank made a foray into the R1.3-trillion mortgage market in May last year.
The company in June also made a foray into personal loans, starting off with existing clients.
The likes of Sanlam are also looking to grow their personal loans books, targeting the mass market, into which Capitec has made serious inroads over the past two decades.
Discovery Group’s headline earnings and normalised headline earnings increased by 30% to R9.6bn and R9.78bn, respectively, in the year to end-June, resulting in the normalised return on equity increasing to 15.4%, from 13.5% in the previous year.
Normalised operating profit grew 29% to R15.2bn and basic normalised headline earnings per share were up 29% at 1,470.4c.
A final dividend per share of 201c was declared, up 32% year on year.
Total new business annual premium income (API) declined 2%, but increased 8% when excluding the large Sasolmed take-on in the previous year, with stronger growth delivered in Vitality.
The group focused on deliberate, disciplined pricing strategies and back-book retention, both leveraging the Vitality shared-value insurance model to optimise margins and returns. This had affected new business growth in some businesses, compounded by macroeconomic challenges, it said.
Discovery SA delivered 22% growth in normalised profit from operations, reflecting a compelling contribution from each business in the composite, it said.
Discovery Health’s operating profit increased 7%, with further investment into technology, innovation and AI to drive continued innovation around the shared-value model and to deepen efficiencies.
Discovery Life’s normalised operating profit increased 14%, mainly driven by an exceptional claims experience. New business declined 10% in total and 2% for Individual Life, maintaining its leading market share but in a soft affluent retail protection market.
Discovery Invest delivered a 29% increase in normalised operating profit given strong growth in the value of assets under management and certain one-off benefits.
Discovery Insure successfully executed pricing and claims management initiatives, which, with benign weather conditions, resulted in big improvement in the claims ratio and a 229% increase in operating profits.
Vitality generated 70% growth in normalised profit from operations, reflecting the progress made in restructuring all the global operations into a focused single business over the past nine months, and particularly strong growth in the UK.
VitalityHealth’s profits increased 173%, driven by effective pricing actions, a stabilising claims environment and rigorous claims and expense management.
VitalityLife’s operating profit increased 70%, with new business growing 28% driven by the effective execution of the shared-value insurance model.
In China, Ping An Health Insurance delivered a strong operating and investment result, generating a 22% increase in pretax profit, despite a big Covid-19 reserve release in the previous year.
The share was down 9.56% at the close.
Update: September 11 2025
This story has new information.
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