Financial services giant Discovery on Wednesday (7 September) pointed to a positive operating performance from its established businesses in a report of its full-year results for the period ended June 2022.
Discovery Bank was singled out in the report for achieving the milestone of one million accounts.
“Despite very volatile political and economic markets, the group has made excellent progress on its growth strategy, as evidenced by Discovery Bank and the evolution of our global healthcare model, mainly through Amplify Health, our recently-announced partnership with AIA in Asia,” said Discovery’s Group chief executive, Adrian Gore.
“Discovery Bank performed exceptionally well, growing its client base to over one million accounts, retail deposits by 30% to R10.6 billion and advances by 14% to R4.3 billion,” said Gore.
Discovery Bank, however, recorded an operating loss for the financial year of R990 million, although it was 10% lower than the previous financial year.
The bank continues to expand its current client base, with 470,220 clients (331,000 in the prior period) and 1,023,790 accounts (versus 649,000 in June 2021), which represents a significant milestone, the group said.
“New business volumes continued to be strong, achieving more than 800 average daily new-to-bank sales (vs 500 in June 2021), showing significant progress toward a medium-term target of 1,000 sales per day and 1,000,000 clients by 2026. The bank has also continued to attract high-quality clients, resulting in high levels of average non-interest revenue (NIR) and a low credit loss ratio of 1.56%.”
Group highlights:
- New business initiatives grew strongly, led by the Bank and initiatives within Vitality Group, notably Amplify Health – positioning the group well to revert to its long-term guidance of 10% of operating profit
- Profit for the year increased by 70% to R5.479 billion
- Normalised operating profit increased by 45% to R9.384 billion
- Normalised headline earnings increased by 71% to R5.816 billion
- Basic headline earnings per share (HEPS) increased by 74% to 792.4 cents
Discovery’s South African group of businesses performed remarkably well, with a strong recovery from Discovery Life and solid performances from Discovery Health and Discovery Invest, said Gore.
Normalised operating profit increased by 41% to R8 679 million and new business by 15% to R14.257 billion, excluding new initiatives. During the period, Discovery Insure was negatively impacted by severe weather events in KZN and an increase in power surge-related claims, combined with considerable supply-side inflation in motor vehicle repairs and parts.
On Discovery’s global expansion, Gore said: “There has been significant investment within new initiatives in Vitality Health International, with a focus on expanding the Group’s global health solutions business and maintaining global leadership in behaviourally led solutions.
“The largest investment over the period was in the Amplify Health joint venture with AIA, offering digital health solutions across Asia-Pacific. The business also launched Shared-value health insurance products, which incorporate Vitality, to employer groups operating in multiple African countries beyond South Africa.”
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