{"id":853367,"date":"2026-03-21T10:00:00","date_gmt":"2026-03-21T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=853367"},"modified":"2026-03-21T10:01:40","modified_gmt":"2026-03-21T08:01:40","slug":"discovery-bank-reward-for-investors-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/853367\/discovery-bank-reward-for-investors-in-south-africa\/","title":{"rendered":"Discovery Bank ‘reward’ for investors in South Africa"},"content":{"rendered":"\n

Discovery’s recent financials were incredibly strong, with the improvements in its bank and international businesses receiving investor approval. <\/p>\n\n\n\n

Discovery’s results for the six months ended 31 December 2025 were incredibly strong, with headline earnings increasing 29% to R5.7 billion. <\/p>\n\n\n\n

Speaking with Business Day, Grant Nader from Benguela Global Fund Managers<\/a> chose Discovery as his stock pick, noting that the group is starting to realise the promise of its previous multi-billion-rand investments.<\/p>\n\n\n\n

These investments were a key draw for investors in the past, and are now starting to deliver meaningful returns. <\/p>\n\n\n\n

This is the case for Discovery Bank, which has become profitable after launching in 2018. <\/p>\n\n\n\n

In its recent financial results, the group said that it saw a notable acceleration in the acquisition of “quality and engaged” clients. <\/p>\n\n\n\n

The bank’s overall client base grew by 28% to 1.4 million clients over the period, with the group currently adding about 1,500 clients per day.<\/p>\n\n\n\n

70% of the customers are also entirely new to the Discovery Group, which Discovery said demonstrates “the bank\u2019s expanding relevance beyond the core Discovery client base.” <\/p>\n\n\n\n

The bank’s normalised profit of R75 million was better than the prior-period loss of R145 million, with operating profit before new business acquisition costs improved by R250 million, ahead of plan. <\/p>\n\n\n\n

Non-interest revenue at the bank increased 39%, driven by the growth in clients and higher product take-up and engagement across the Vitality model. This increased fee income per client. <\/p>\n\n\n\n

Deposits in the bank increased by 21% from December 2024, while advances increased by 42%. This was supported by strong growth in home loans, which reached R2.9 billion at the end of the period. <\/p>\n\n\n\n

The bank also benefited from increased efficiency gains from the increased use of AI and automated service channels. <\/p>\n\n\n\n

Discovery added that it aims to drive further growth in the bank by tapping into the group’s broader South African client base of 6.5 million customers. <\/p>\n\n\n\n

International business <\/h2>\n\n\n
\n
\"\"<\/a>
Grant Nader from Benguela Global Fund Managers<\/figcaption><\/figure><\/div>\n\n\n

Nader added that Discovery’s UK business, Vitality, is also starting to show improvements following a difficult few years. <\/p>\n\n\n\n

Vitality\u2019s normalised operating profit increased by 41% to R2.1 billion, which Discovery said came off the back of exceptional performances in both the UK and China.<\/p>\n\n\n\n

Fiscal challenges in the UK are putting pressure on the National Health Service (NHS) and on a higher inheritance tax burden.<\/p>\n\n\n\n

These pressures limited economic growth, but Discovery said they also drive increased demand for private health insurance and life insurance for estate planning. <\/p>\n\n\n\n

Nader noted that Discovery is starting to rein in its investments as cash flow from its large-scale projects kicks in.<\/p>\n\n\n\n

With South Africa having limited growth opportunities, Nader said that Discovery is one of the few examples of a company with “organic growth” <\/p>\n\n\n\n

The share has experienced some volatility, but Nader believes it is a good investment for those with a two-to-three-year time horizon. <\/p>\n\n\n\n

Feature<\/th>31 December 2024<\/th>31 December 2025<\/th>Segmental Profit<\/strong><\/th><\/tr><\/thead>
Headline earnings (Rm)<\/td>5,692<\/td>4,428<\/td>29%<\/td><\/tr>
Basic earnings per share (cents)<\/td>847<\/td>661<\/td>28%<\/td><\/tr>
Headline earnings per share (cents)<\/td>850<\/td>667<\/td>27%<\/td><\/tr>
Return on Equity (%)<\/td>17.4%<\/td>15.4%<\/td>2%<\/td><\/tr>
Dividend (cents)<\/td>111<\/td>87<\/td>28%<\/td><\/tr>
Segemental Profit<\/strong><\/td><\/td><\/td><\/td><\/tr>
Discovery Health (Rm)<\/td>2,128<\/td>2,023<\/td>5%<\/td><\/tr>
Discovery Life (Rm)<\/td>3,093<\/td>2,686<\/td>15%<\/td><\/tr>
Discovery Invest (Rm)<\/td>984<\/td>972<\/td>1%<\/td><\/tr>
Discovery Insure (Rm)<\/td>546<\/td>378<\/td>29%<\/td><\/tr>
Discovery Bank (Rm)<\/td>75<\/td>(145)<\/td>>100%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Discovery Bank is now profitable, with long-term investors starting to benefit from their belief in the group. <\/p>\n","protected":false},"author":95,"featured_media":646263,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[4883],"class_list":["post-853367","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-discovery"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853367","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=853367"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853367\/revisions"}],"predecessor-version":[{"id":853389,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853367\/revisions\/853389"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/646263"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=853367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=853367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=853367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}