Discovery Bank made pleasing progress over the period, growing to over 287,000 clients with more than 540,000 accounts, with weekly average new-to-bank clients continuing to grow. Retail deposits reached R5.7 billion, as at 31 December 2020, with advances more stable at R3.8 billion reflecting the conservative lending strategy, resulting in a 69% lower arrears rate compared with the market. Following the successful completion of its account’s migration process, where it moved over FNB Discovery Card clients to its platform, just over half (53%), have upgraded to Discovery Bank. IT systems are managing the growing customer and transactional volumes well and proved very stable over the 2020 year-end period, maintaining a systems uptime of >99.9%.
Discovery said that normalized operating profit for the group increased by 19% to R4.5 billion, for the six months ended December 2020, while normalized headline earnings decreased by 1% to R2.3 billion and total new business was up 8% to R10.9 billion. Investment in new initiatives was at 22% of earnings, compared with 26% in the previous period. Discovery Bank reported a loss of R611 million for the period under review, down from R530 million it lost in the prior period. Due to the uncertain and potentially volatile economic environment caused by the Covid-19 pandemic, Discovery has not declared an interim ordinary share dividend. Discovery’s earnings per share (basic) and headline earnings per share (basic), for the period ending June 2021, are expected to be at least 20% higher (17.8 cents and 54.0 cents, respectively) than that reported for the year ended June 2020.