Discovery Bank enters a new era with 600% profit jump

Discovery Bank has declared its first annual profit, with the bank’s normalised profit from operations surging 600% to R370 million. 

This marks the beginning of a new era for the bank, where it no longer requires investment from the group.

Discovery is estimated to have invested R15 billion in building the bank. 

The bank’s first profit was revealed in Discovery’s annual results for the financial year ended 30 June 2026.

Discovery is now in its “scaled organic growth” phase after investment into new business units, including the bank and the global Vitality network. 

During this phase, the insurer aims to grow its normalised annual profit by more than 15% through 2029 and improve its cash conversion. 

This will effectively double the size of the business, which is no mean feat off a base of R9.6 billion in headline earnings in the 2025 financial year. 

Discovery’s latest annual results show that the transition towards scalable, cash-generating businesses is going better than expected. 

Normalised profit from operations grew by 17% to R17.75 billion, with headline earnings surging 34% to R12.9 billion. 

This is despite a difficult operating environment in South Africa and abroad, marked by heightened volatility. 

“However, the structural trends underpinning Discovery’s opportunity set continued to strengthen,” Discovery said. 

Against a backdrop of rising rates of chronic disease, rising healthcare costs and advances in technology, Discovery said its shared-value model has come into its own. 

“The result reflects the increasing scale and maturity of the Group’s two composites, Discovery South Africa and Vitality,” it said. 

“This validates the strategic foundations established through disciplined investment in platforms, proprietary intellectual property and data-driven capabilities.” 

Discovery South Africa, which includes the bank, grew its normalised profit by 16% to R13.9 billion. Vitality’s normalised profit jumped 21% to R3.8 billion. 

The Vitality composite includes Discovery’s UK business and the company’s partnership with Ping An Health Insurance in China. 

Discovery Bank coming to the fore

The success of Discovery’s scaled organic growth phase largely lies in the performance of its bank. 

Discovery Bank posted a R370 million profit in the 2026 financial year, its first full-year profit and evidence of its progress. 

The result reflects continued growth in scale, leveraging improved operating efficiency and client experience and engagement,” Discovery said. 

Discovery Bank’s client base grew by 26% to 1.57 million clients, with total accounts growing to 3.77 million. 

Crucially, many of these clients are new to the Discovery ecosystem, with 70% of new business originating from outside the Discovery Group. 

Discovery Bank also has a notable edge over its established rivals in that its non-interest revenue exceeds its net interest income. 

This means the bank is making most of its money through highly profitable fee and commission income rather than from lending, which is capital-intensive. 

As a result, the bank is less sensitive to interest rates and more profitable than a typical retail bank. 

Retail deposits increased by 17% to R27.2 billion, while gross retail advances grew by 40% to R12.9 billion. 

This balance sheet growth supported a 29% increase in net interest income, while the credit loss ratio improved to 2.71%.

The bank’s next phase is the creation of a “super bank”, where it will be the primary platform for clients to engage with all of the group’s services. 

The integrated ecosystem spans protection, health, wealth, and banking.

In effect, clients will engage with all these products on the banking app, creating significant cross-selling opportunities. 

This is why the majority of the bank’s clients being new to the Discovery ecosystem is so crucial, as its growth translates directly into more medical aid members, more investment clients, and more insurance policies. 

Under the scaled organic growth phase, Discovery Bank targets R3 billion in profit by 2029.