Discovery Bank attracted over R9.5 billion retail deposits from over 400 000 clients, reaching a new turning point in the six months ended December 2021.
The digital bank, headed by Hylton Kallner as CEO, says its service offering, which caters for the full spectrum of the retail market, has been driving high levels of client engagement, adding it is on track for break-even by 2024.
The digital bank, owned by Discovery Group, today gave shareholders an insight into its financials in the six months to December.
Discovery Bank’s improved performance in the period comes as South Africans are favouring digital banks for their competitive banking costs.
The latest Solidarity Research Institute bank charges study shows how the new online banks − namely TymeBank, Discovery Bank, Spot Money and Bank Zero − are charging less for banking, thereby attracting new customers.
Today, Adrian Gore, CEO of Discovery Group, revealed that Discovery Bank’s performance in the period exceeded expectation across all metrics and advanced its strategic objective of forming the core of the SA composite.
In the six months, Discovery Bank’s normalised operating loss was better than planned at R498 million, 18% lower than the prior period.
The digital bank also continued to gain traction, with 385 200 clients (versus 287 182 clients in December 2020) and 793 215 accounts (versus 540 252 in December 2020).
It adds it is expanding its existing Discovery and non-Discovery client base and is achieving more than 750 average daily new-to-bank sales.
“Retail deposits grew by 69% to R9.5 billion and advances grew at 10% to R4.1 billion at 31 December 2021. Customer quality remains excellent, with high average levels of non-interest revenue per client, and the quality-focused credit strategy was evidenced by the low credit loss ratio of 0.96%.
“The benefits of the business model continue to manifest in improving operating leverage, with overall costs remaining constant in real terms, notwithstanding the significant customer growth and product innovations.”
In addition, Discovery says the bank continues to innovate and has launched its “comprehensive, real-time forex capability on the Discovery Bank app that gives access to immediate foreign currency transactions”.
The bank’s travel platform and Discovery Pay accounts are expected to launch in the coming months.
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