(Bloomberg) — One of South Africa’s newest banks is looking to accelerate its number of accounts to 1 million by June.
Digital lender Discovery Bank registered a 31% jump in customer accounts to 850,000 in the half year through December, now wants to add another 18% within six months.
“That would really be a a significant milestone for the business and I think reflect the fact that we really are gaining in scale,” Chief Executive Officer Hylton Kallner said in an interview.
The bank was launched by Johannesburg-based insurer Discovery Ltd. in November 2018, aiming to use internet-based technology to compete with more established peers. The majority of clients come from the middle and upper-income segment of society, who are looking for convenient digital offerings, Kallner said.
The growth still trails rival newcomer TymeBank, part of billionaire Patrice Motsepe’s business empire, which has lured 4 million customers since launching three years ago.
People deposited 9.5 billion rand ($617 million) in Discovery Bank by the end of December, a 51% increase year-on-year, as customers were wooed by the higher interest rates the lender pays on savings, the CEO said.
“Our interest rates for clients who manage their money well on their demand savings – which are accessible today – are at the same level as what they would typically get for a 12 to 18 month fixed deposit,” Kallner said.
The bank is also growing its foreign-exchange products, and will soon allow clients to purchase and sell equities straight from their account thanks to a partnership with trading platform EasyEquities, which is 70% owned by Purple Group. The additions will boost fee income and put the bank on the way to break-even by 2024.
“Where we are tracking now is actually almost a year ahead of where we thought you are in the business,” Kallner said. If that’s sustained it “will give very good long-term results,” he said.
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