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Financial services group Discovery has set a target for its fledgling banking proposition to report R3bn profit in 2029 after the lender turned its maiden full-year profit of R370m for the year ended June — snapping up about 1,000 clients a day.Discovery Bank, which the group has put at the centre of its growth strategy, went to market in 2019 and has since grown to a platform with just under 1.6-million clients and nearly 3.8-million accounts.Group CEO Adrian Gore says the company’s South Africa business is progressing into its next strategic phase, creating an integrated ecosystem through the superbank strategy.“Following its quality scaling, Discovery Bank is evolving beyond a standalone banking proposition to becoming the orchestrating layer for customers’ financial and health lives, providing a seamless interface through which customers can engage with, and derive value from, the broader Discovery ecosystem,” he said.“The superbank strategy creates a differentiated competitive advantage that deepens engagement, strengthens cross-selling, and supports growth in each South African business. As the ecosystem scales, it enhances the quality of customer relationships and reinforces the long-term earnings growth potential of the South African platform.“Financially we have said the bank will achieve a R3bn profit level by 2029. We are quite comfortable that we are on track to achieve that target, despite being a big ask. If the superbank does what we expect it to, it puts the group in a different dimension.”The bank’s profit for the 2026 financial year follows steady trimming of losses since its launch, having reported a loss of R68m in the 2025 year — translating into a 685% improved performance in the year under review.The bank, led by Hylton Kallner, has managed to woo clients outside the Discovery ecosystem with about 70% of new business originating from outside the Discovery group, presenting the company with huge cross-selling opportunities.Retail deposits increased 17% to R27.2bn, while gross retail advances grew 40% to R12.9bn in the year under review.Nedbank in its 2025 annual report released earlier this year singled out Discovery Bank as one start-up that was making tangible inroads in customer deposits.Discovery Bank’s home loan product had also made headway in the lucrative segment of the market, dominated by Standard Bank, which finances one out of every three home loans.Discovery Bank’s home loan book topped R4bn in advances in the year under review — up 129% year-on-year. Home loans, alongside the lender’s newly launched personal loans, were the key drivers of overall advances growth to R12.9bn, which grew 40%.“Critically, this growth has been achieved without compromising quality. 73% of Discovery Bank’s new home loans were issued to super-prime clients — the highest proportion in the market and well ahead of peers. The home loan book’s credit loss ratio was just 0.15%, with stage 2, stage 3, and overall credit-loss rates significantly below market averages,” Gore said.“The book remains predominantly switch-driven (71% of the book), reflecting strong appeal to established, high-quality homeowners looking for a better deal.”Business Day
