Discovery Bank reports R1-billion loss but says business on track

September 7, 2022 Siyabonga Mtangana

Discovery’s head office in Sandton. Image: Boogertman and Partners

Discovery Bank reported a nearly R1-billion loss in the year ended June 2022, though parent Discovery Group said costs are coming down and the bank remains on track to achieve its targets.

The normalised loss came to R990-million, a 10% reduction from the R1.1-billion loss of a year ago due to reduced spending by Discovery on the digital bank.

“The group is emerging from a cycle of intense organic investment into new initiatives, dominated by the investment in Discovery Bank, which has seen excellent, high-quality growth over the period,” it said.

The bank’s client base expanded to 470 000 by 30 June, from 331 000 a year ago.

The number of active accounts topped a million, from 649 000 before, representing a “significant milestone for the bank”.

Retail deposits grew by 30% to R10.6-billion, and advances climbed by 14% to R4.3-billion.

Read: How digital banking challengers Discovery and TymeBank are faring

“The bank has also continued to attract high-quality clients, resulting in high levels of average non-interest revenue and a low credit loss ratio of 1.56%,” it said.

Discovery said it is on track to sign up a million clients by 2026.

For the year ended 30 June 2022, Discovery’s group normalised operating profit increased by 45% to R9.4-billion million and normalised headline earnings increased by 71% to R5.8-billion. – © 2022 NewsCentral Media