South African tycoon Adrian Gore’s Discovery Bank targets nearly $180 million profit

Discovery Bank, the digital lender backed by South African businessman Adrian Gore’s Discovery Limited, is setting its sights on profit and growth. The Johannesburg-based bank expects to nearly double its customer base while expanding lending as it targets earnings of R3 billion ($173 million) by 2029.

“It’s the fastest-growing bank in South Africa today,” Chief Executive Officer Hylton Kallner said in an interview. He noted that the bank is aiming to reach 2 million customers by 2029. Discovery Bank, which launched six years ago, broke even in the second half of its fiscal year ended June 30 — a milestone that came a year earlier than planned.

The lender also narrowed its full-year loss to R68 million ($3.9 million), an 85 percent improvement from R454 million ($26.2 million) the previous year. With 1.2 million customers already on its books and about 1,000 new signups each day, Kallner said Discovery Bank is counting on steady client growth to drive profitability.

Expanding loans and services

Discovery Bank has been leaning on product growth to fuel results. This year it introduced revolving credit facilities and expanded its personal and home loan offerings, helping boost total loans by 39 percent in the 12 months through June. The bank now plans to lift its loan-to-deposit ratio to as high as 70 percent by 2029, up from about 39 percent today.

“Our advances are less than half of our deposits, which gives us space to expand within our current funding plan,” Kallner said. “We expect advances to keep outpacing deposits in the near to medium term. The market is competitive, and to keep up, we will need to continue innovating.”

As part of that push, the bank is preparing to launch an artificial intelligence tool aimed at its private banking clients. The system will allow some customer interactions to take place through messaging platforms, including Meta’s WhatsApp, making services more accessible.

Discovery Group’s broader gains

Discovery Bank is part of Discovery Limited, the financial services conglomerate Gore and Barry Swartzberg founded in 1992 as a medical insurer. Gore, who owns 6.71 percent of the group, has since overseen its expansion into health, life insurance and its popular Vitality wellness programs, making it one of South Africa’s most diversified financial services companies.

Discovery Limited reported a 26.6 percent increase in annual profit for the year through June, rising to R9.56 billion ($545 million) from R7.55 billion ($430 million) a year earlier. Growth was driven by strong performance in its health, life and Vitality units. Gore said the company expects profits to grow faster than its long-term target of inflation plus 10 percent, without the need for new capital.