Discovery making bank in South Africa – BusinessTech

Finance group Discovery has reported a major profit lift in its interims, with headline earnings jumping 29% to R5.7 billion for the six months ending December 2025.

The period also marked a major milestone for the group’s banking unit, Discovery Bank, which turned a normalised profit of R75 million for the first time, swinging from the R145 million loss in the prior period.

Discovery South Africa delivered 19% growth in normalised profit from operations, reflecting a compelling contribution from each business in the country.

The global behavioural unit, Vitality, generated 41% growth in normalised profit from operations, reflecting the restructuring of its global operations.

Discovery said that the headline earnings growth reflected the group’s improving financial leverage
ratio, which translated to lower finance charges.

The normalised return on equity increased to 17.4%, from 15.4% in the prior period.

The group declared an interim dividend of 111 cents (88 cents net of dividend withholding tax) per ordinary share, out of the income reserves of the company.

Discovery said that it delivered a strong performance despite an ‘increasingly complex’ environment as a result of geopolitical and trade tensions.

“In the period under review, economic growth remained below potential in many regions in which the group operates,” it said.

“However, easing interest rates supported an improved backdrop for investment markets.”

Specifically in South Africa, constructive collaboration between private and public enterprises in key areas of service delivery and improved terms of trade has supported the emergence of green shoots in the economy.

In the UK, however, fiscal challenges have led to pressure on the National Health Service (NHS) delivery and a higher inheritance tax burden.

“While these macro challenges do constrain economic growth, they also drive increased demand for private health insurance as well as life insurance for estate planning purposes,” it said.

Globally, healthcare inflation remained elevated, compounded by growing demographic challenges and the acceleration of the “quantified self” movement, which is driving a rapidly developing wellness economy; both trends are particularly pronounced in the United States (US).

Risks also remain elevated; however, the velocity of AI disruption underpins the relevance of the Vitality Shared-value model and the group’s unique data, positioning it uniquely for continued growth.

Discovery Bank swings into profit

A stand-out in the group’s results is Discovery Bank, which has posted its first profit in a reporting period.

The bank, which launched in November 2018, performed ahead of plan on all metrics, Discovery said, with a notable acceleration in the acquisition of “quality and engaged” clients.

The bank’s total client base grew by 28% to 1.4 million clients over the period, with the group currently acquiring approximately 1,500 clients per day.

Notably, more than 70% of these new clients are entirely new to the Discovery Group. This demonstrates “the bank’s expanding relevance beyond the core Discovery client base,” it said.

Discovery Bank’s normalised profit of R75 million was better than the prior-period loss of R145 million, with operating profit before new business acquisition costs improving by R250 million, ahead of plan.

Non-interest revenue increased 39%, driven by client growth and higher product take-up and engagement across the Vitality model, which lifted fee income per client.

Expenses benefited from growing economies of scale, with operating leverage improving as the book expanded.

Notably, the bank marked efficiency gains from increased use of AI and automated service channels.

Deposits increased 21% from December 2024, and advances grew 42%, supported by strong growth in home loans—R2.9 billion at the end of the period.

Looking ahead, Discovery said that it aims to drive further growth in the bank by tapping into Discovery SA’s broader 6.5 million client base, which grew by 7% during the period.