Insurance group Discovery has received authorisation from the Registrar of Banks to establish a banking presence in South Africa.
The group said it now has 12 months to fulfil certain conditions set out by the registrar, and obtain its final approval in terms of Section 17 of the Banks Act.
Discovery announced in late 2015 that it planned to establish an ‘innovative full-service retail bank’, after acquiring control of its credit-card unit from FirstRand, with CEO and co-founder Adrian Gore noting that the project may take a few years.
Discovery CEO Adrian Gore said the group has had tremendous success with its joint venture with FNB on the DiscoveryCard – Discovery’s credit card, which has more than 250,000 customers.
This success gave the group the impetus to investigate building a full service retail bank, he said.
“We’re flat out with the infrastructure and the regulatory process for banking,” Gore said in an interview with Bloomberg in August. “We’ve got the capital, we’ve hired bankers, we’re building substantial systems. We want to make an offering that’s relevant and can win market share.”
“We’re looking at the modern and traditional structures that people need,” Gore told Bloomberg. “We’ve got a good embedded base with Discovery Card. We’re comfortable that we’re heading in the right direction. It will take a year or two to get it into the market.”
Discovery launched as a private health insurer in 1992 and has since expanded into investments, credit cards, life insurance and property and casualty cover.