Discovery Bank is expected to enter the home loan market in April, reports Moneyweb, citing Discovery Group CEO Adrian Gore.
He pointed to an “embedded client base within Discovery Bank [that] has R280 billion of home loans”.
Chief executive of Discovery Bank Hylton Kallner confirmed in September 2023 that the bank would offer home loans at competitive interest rates of up to prime less 1.5%.
“Discovery Bank will offer clients an entire home ecosystem which incorporates competitive home loans, protection for their homes and family, access to additional financing and exclusive solar solutions, on top of rewarding clients for managing their money well with up to 1.5% off their home loan interest rate,” said Hylton Kallner, Discovery Bank CEO at the time.
This ecosystem enables clients to purchase, protect, power, and furnish their homes, by integrating with Discovery Insure for protection of their biggest investment and contents, and with Discovery Life Home Loan Protector to secure ones’ home in the event of a tragedy.
Moreover, Discovery Bank's energy solutions would provide access to solar technology, inverters, and portable backup power, with financing options extending up to 72 months and installation within 48 hours.
Another feature is the bank's Revolving Access Facility, offering clients immediate access to a flexible credit facility for various needs like transfer fees, home renovations, maintenance, or new furniture. Clients can draw from and repay this facility based on their financial planning.
“Over the last year, the home loan product was built, was being alpha tested”, and “will be rolled out – we hope – in the next four weeks," said Gore.
Earlier in March, the group presented robust half-year results to the investor community, with an update on Discovery Bank reaching its monthly operational break-even ahead of the group’s target date.
“In an environment characterised by continued macroeconomic complexities, Discovery delivered a strong operating performance that is underpinned by our continued investment in future growth platforms as well as an adherence to financial discipline," said Gore.
For its South Africa operation - Discovery Health, Discovery Bank, Discovery Life, Discovery Invest, Discovery Insure - normalised operating profit increased by 9% to R4 355 billion and new business by 29% to R11 100 billion.
At a group level, normalised operating profit increased 13% to R5 622 billion; headline earnings were largely unchanged; normalised headline earnings increased 11% to R3 320 billion; and new business annual premium income (API) increased 28% to R14 197 billion.
For the six months under review, Discovery Bank’s operating loss, before new business acquisition costs, improved by 40% and the Bank had more than 825,000 clients as of December 2023.
"The bank is growing rapidly through the acquisition of quality clients on a scalable platform and its exceptional customer engagement position is set to play a central role in advancing the group’s South African business through integrated ecosystems, it said.
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