Discovery Bank announced on Wednesday that the number of new clients was 45 916 as of 30 June 2020 versus 197 in 2019, with average customer advances of R20 500.
The digital bank said it now has 489 000 as of 13 September 2020 versus 370 000 accounts at end June.
The bank, which is powered by the country’s largest medical aid provider Discovery Health, said this performance was pleasing.
The year under review represented the first year of the bank’s operation.
The bank said that given the onset of COVID-19, it implemented three strategies, namely:
- Ensuring the successful migration of over 220 000 Discovery Card accounts from First National Bank to Discovery Bank
- Pursuing a deposit-led growth strategy, while ensuring the quality of the loan book and maintaining the quantum spent on the bank’s build within budget, and
- Ensuring rapid learnings from the Shared-Value model to constantly improve the bank’s user experience and value proposition.
All three strategies were successfully deployed, with a system uptime of 99.9%.
Discovery disclosed on Wednesday that total credit limits granted were R5.5 billion of which R2 billion was utilised (R9.6 billion at 13 September with R3.7 billion utilised).
By the reporting date, the migration was completed, and retail deposits exceeded the loan book, resulting in the bank having significant surplus liquidity of R3.8 billion and capital strength.
“The quality of deposits was strong with 65% of deposits from clients with a Diamond Vitality Money status,” the bank said.
“The loan book was excellent with arrears 60% lower than market arrears.”
Discovery Bank added that its value proposition has been significantly enhanced via a more accessible Vitality Money experience, more powerful Discovery Miles, and a more intuitive user experience. These enhancements will be announced at the end of September 2020.
Discovery Bank has introduced various initiatives to support clients, including boosted rewards, with 336 million Discovery Miles awarded over the lockdown period. “The arrears rate at end of June was 5.4% and is still considerably below the market average for credit cards.”
Furthermore, Discovery Bank entered a 2-year revolving credit facility of R1 billion.
The facility is structured with R500 million guaranteed by Discovery Limited, Discovery Vitality and Discovery Health while the remaining R500 million is not guaranteed. Interest on both facilities is linked to the 3-month JIBAR plus a margin of 1.25% per annum and 1.35% per annum. Interest is payable quarterly in arrears and capital is repayable in full at maturity on 19 July 2021