In a significant development for South Africa’s banking landscape, Discovery Bank has achieved its monthly operational break-even, surpassing the group’s expectations and setting a strong foundation for future growth. The milestone was revealed as insurance giant Discovery unveiled its financial results for the six months ending December 31, 2023.

Break-even Achievement Ahead of Target:

• Discovery Bank has reached its monthly operational break-even ahead of the group’s target date.
• This milestone comes after the bank had been making losses since its launch, aiming to challenge traditional banking norms.
• Discovery Bank was first announced in November 2018 and publicly launched in 2020, billing itself as the “world’s first behavioural bank.”

Financial Results Overview:

• During the six-month reporting period, Discovery’s South African businesses, including Discovery Health, Discovery Life, Discovery Invest, and Discovery Insure, saw a 9% increase in normalized operating profit to R4.3 billion ($200M) and a 29% rise in new business to R11.1 billion ($593.7M).
• The firm’s focus remained on achieving growth, cash generation, and capital resilience, with a particular emphasis on scaling platforms like Discovery Bank and Vitality Global for accelerated future growth.

Group Chief Executive’s Comments:

• Adrian Gore, Group Chief Executive, commented on the disciplined strategy employed, emphasizing diligent capital allocation, growing cash generation, and strengthening the balance sheet.
• Gore highlighted the robust growth of core businesses during the period and the exceptional performance of Discovery Bank and Vitality Global, positioning them as strong platforms for continued growth.

Discovery Bank’s Performance:

• Discovery Bank’s banking business delivered excellent results, achieving its stated target of monthly operational break-even ahead of plan.
• During the reporting period, the bank’s operating loss, before new business acquisition costs, improved by 40%.
• As of December 2023, Discovery Bank boasted more than 825,000 clients, showcasing rapid growth through the acquisition of quality clients on a scalable platform, with exceptional customer engagement.

Future Outlook:

• Discovery emphasized the role of Discovery Bank and Vitality Global as strong platforms for continued growth, foreseeing them as integral components of the group’s South African business through integrated ecosystems.

Conclusion:

• Discovery Bank’s achievement of operational break-even underscores its resilience and strategic positioning within the banking sector, reflecting the success of its innovative approach and focused investments.
• As Discovery Bank continues to evolve and expand its footprint, it is poised to play a central role in shaping the future of banking in South Africa, setting new benchmarks for excellence and innovation in the process.