Six years and R10.5 billion later — A big win for Discovery Bank
Discovery Bank reached a significant milestone between January 2025 and June 2025 — posting its first profit over a half-year period since launching in 2019.
In a trading statement on Wednesday, Discovery Group said the digital-only bank had become profitable during the six months ending June 2025 and had therefore reached breakeven ahead of schedule.
While it still recorded a loss over the entire 2024/25 financial year, the amount was about 82% to 87% lower than in 2023/24.
Considering the bank contributed a net loss of R454 million during that year, its latest annual loss should be around R59 million to R82 million.
Discovery previously also reported impressive customer and revenue growth between July and December 2024.
Customers increased by 32% — climbing from 825,068 to 1.09 million, while accounts surged 35% from 1.93 million to 2.61 million.
It also reported a profit before acquisition of new businesses of R69 million, compared to a loss of R154 million in the previous half-year in 2023.
The bank’s first monthly breakeven was achieved in December 2024, which it said was ahead of its plan. It attributed this to accelerated quality client growth.
While the improvements cannot be disregarded, the bank still has a long way to go before it will be a net benefit for the group.
Taking into account its initial setup costs and operating losses since establishment, the bank has cost the Discovery Group over R10.5 billion.
Further details on Discovery Bank’s financial results will be revealed on or about 11 September 2025, when its parent plans to release its 2024/25 annual financial statements.
The group is expecting to report 26% to 31% higher normalised profit from operations and 27% to 32% higher headline earnings.
The table below summarises Discovery Bank’s initial setup costs and annual operating losses to date.
| Financial year or period | Cost |
|---|---|
| Initial startup period | R6 billion |
| 2019/20 | R1.17 billion |
| 2020/21 | R1.09 billion |
| 2021/22 | R990 million |
| 2022/23 | R767 million |
| 2023/24 | R454 million |
| 2024/25 | R59 million–R82 million* |
| Total | R10.54 billion–R10.56 billion |
| *Estimated loss based on 82% to 87% loss decline over 2023/2024. | |
Quality over quantity
Discovery Bank experienced significant challenges in its initial years, including early customer acquisition being slower than planned.
The bank’s launch came during a tough economic period and increased competition in the banking industry.
Many of Discovery Bank’s potential clients were leaving the country, while it also came under pressure from a Solidarity campaign criticising its plan to give 10% of the bank’s shares to black people.
While Discovery Bank argued this was a good thing to do, it was also one of the conditions of its banking licence.
After launching to the public on 1 July 2019, it planned to add 1,000 new customers every day over two months. By mid-February 2020, it had reached 180,000 customers, working out to about 770 per day.
Discovery Group CEO Adrian Gore brushed off concerns about slow growth, arguing that the focus was on attracting quality customers who engaged with the bank and its incentives.
“We’ve seen that the client engagement levels have far exceeded expectations in all key areas, in particular the number of accounts per client,” Gore said at the time.
“We therefore remain markedly ahead of our targets and pleased with the performance and progress.”
Technical and security hiccups
The bank also encountered several technical issues and security problems in its first year. In October 2019, a security vulnerability allowed people to transact with Discovery Bank cards without entering the CVV — a key component for preventing fraud.
In November 2019, Discovery Bank customers had their full outstanding credit card balances mistakenly deducted from their debit accounts.
People who were using the Discovery Gold credit card — issued under licence from FNB — also had problems migrating to Discovery Bank.
The bank has made major strides since these technical teething problems in its infancy. In DataEQ’s South African Bank Sentiment Index report for 2024, it ranked as the country’s favourite bank.
It has also launched several innovative products and improved its technical and security capabilities greatly over the last few years.
Most recently, it launched a panic code feature to help the bank identify when a customer may be making forced transactions while held by criminals.
Aimed at addressing the worrying rise in “express kidnappings,” Discovery Bank CEO Hylton Kallner said the solution was being patented as an industry first.
It also launched a persistent fraud warning feature that analyses customers’ calls to assess whether they may be on the line with a scammer.
Loading ...