Business Maverick: Discovery Bank grows while Discovery Insure takes an operating profit hit

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A complex operating environment, including the Covid-19 Delta and Omicron variants, as well as significant market volatility did nothing to deter Discovery’s overall growth, with the company reporting overall normalised operating profit up 8% to R4.9-billion in the interim period.

Discovery released interim financial results for the six months to December 2021 this week, with group chief executive and founder Adrian Gore saying that the shared-value insurance model ensured Discovery’s resilience during a tough period.

Discovery Bank now boasts more than 400 000 clients with 793 215 accounts and more than R9.5-billion in retail deposits. Most recently, Discovery Bank launched a real-time forex capability on its banking app that gives clients access to immediate foreign currency transactions. New offerings expected to launch in coming months include a travel platform and Discovery Pay accounts.

Overall normalised operating profit increased 8% to R4.9-billion, and normalised headline earnings grew 26% to R2.9-billion. Gore says the company’s key financial metrics demonstrate management’s commitment to prudent risk, capital and cash management during the pandemic, without losing focus on a robust growth strategy. Just last week, Discovery announced that it was taking a 25% stake in an Asian-based joint venture – Amplify Health – with the AIA group.

“Discovery has navigated the COVID-19 pandemic across all global operations, with mortality risk in South Africa having the largest impact financially. This period was characterised by the Delta variant and towards the latter part of 2021, the highly infectious Omicron variant, which have been shown to be less clinically severe than the Delta variant,” Gore says.

 

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