Discovery grows operating profit 17% to R17.75bn as Bank drives new strategic phase

Johannesburg, South Africa, 3 September – Discovery today announced financial results for the year ended 30 June 2026, reporting a 17% increase in normalised profit from operations to R17.75 billion. This was driven by strong growth in South Africa, including the continued scaling of Discovery Bank, and the Vitality international businesses.

Adrian Gore, Discovery Group Chief Executive said in his presentation, “These results reflect the strength and maturity of Discovery in South Africa and Vitality internationally, and demonstrate the value created through disciplined investment in our shared-value model and growth platforms.”

Group performance highlights

While the review period was marked by geopolitical uncertainty, policy shifts, and ongoing volatility in global financial markets, the Group’s results reflect a strong operational performance with a continued investment in capabilities that will support future growth.

• Headline earnings increased 34%, while normalised headline earnings increased 21%.
• Normalised return on equity improved to 16.5% from 15.4%.
• Embedded value increased to R143 billion, delivering a 14.1% return on embedded value.
• Total new business API increased 6%.
• Cash conversion improved to 85% of after-tax normalised operating profit.
• Financial leverage reduced further to 15.4%, supporting greater financial flexibility.

Discovery Bank profitability and scale enable next phase of the Super Bank strategy

The Bank delivered a profit of R370 million compared with a loss of R68 million in the previous period, as it continued to scale its client base, enhance engagement and deploy AI-driven capabilities. Client numbers increased 26% to 1.57 million, revenue grew 31% to R3.1 billion and 70% of new business originated from outside the Discovery Group.

Gore said Discovery is entering a new strategic phase in South Africa as Discovery Bank evolves into an integrated platform that connects and orchestrates customers’ banking, health, insurance and investments to deliver shared value, personalisation and improved customer experiences. “This evolution underpins Discovery’s Super Bank strategy, which aims to create a more connected customer experience across the ecosystem and makes the delivery of shared value seamless,” he said.

The Vitality Shared-value model scales globally

As Discovery advances its Super Bank strategy in South Africa, the Group is also accelerating the deployment of its Vitality Shared-value model globally. It remains a key driver of growth across all global businesses. The model combines behavioural science, data, advanced analytics and AI-driven personalisation to improve health and financial outcomes, while creating long-term value for customers, shareholders and society.

Gore commented, “At the centre of the model is a simple idea: when people are encouraged and rewarded to make better health, driving and financial decisions, everyone benefits. As customers achieve better outcomes, the business performs better and, at scale, those individual improvements lead to broader societal impact.”

The value created by the Vitality Shared-value insurance model is evidenced through the following examples:

1. Value for shareholders is evidenced by improved profitability, margins and operational efficiency across the Group in the financial year.

• VitalityLife's operating profit increased by 27% to £34.5 million (23% to R782 million), benefitting from favourable claims experience and lower cashflow variances.
• Discovery Bank’s revenue increased 31% to R3.1 billion, while operating expenses continued to benefit from economies of scale as the Bank grows, driving a significant improvement in profitability and returns, while maintaining disciplined risk outcomes.

2. Value for customers is generated by healthier behaviour leading to fewer claims. Behaviour change resulted in R2.2 billion in claims savings during the period across the Group with clear outcomes in each business.

• Engaged Discovery Life clients add an average six years to their lives compared with non-engaged members (Gold and Diamond Vitality status members relative to non-engaged Blue Vitality status)
• Engaged Discovery Insure clients experience 74% lower road fatality rates.
• Discovery Health Medical Scheme members receive a 17.7% lower cost per benefit unit compared to competitors.

3. The combined effect of millions of healthier daily decisions creates value for society:

• The Vitality model impacted approximately 54 million lives globally.
• Members completed 725 million healthy activities.
• The model contributed to an estimated 5.2 million life years saved globally.
• R17.2 billion was returned to clients through Discovery's shared-value dividend.

Vitality now covers just under 12 million lives outside China (up 14%), while Ping An Health Insurance increased covered lives to more than 35 million.

Market-leading businesses in South Africa drive growth

Discovery South Africa demonstrated quality and excellence in all businesses with increased normalised operating profit by 16% to R13 868 million and strong growth in new business volumes, up 8% to R19 534 million.

The business-specific highlights include:

• Discovery Health increased normalised operating profit by 9%, with new business API up 10% and continued membership growth across the Discovery Health Medical Scheme.
• Discovery Life increased operating profit by 6% to R5 872 million and maintained its leading position in the affluent retail protection market with a 27% market share.
• Discovery Invest increased operating profit by 9% to R2 157 million off a high base, supported by strong asset growth and positive net inflows.
• Discovery Insure delivered 29% growth in normalised profit from operations before associates, with operating margin improving from 11.9% to 14.8%.

Vitality delivers 21% profit growth and expands global reach

Vitality completed the transition to a regionalised operating model, with the UK as centre of excellence and cost structures apportioned across the composite to support the efficient deployment and scaling of capabilities across markets. The business increased normalised operating profit by 21% to R3 882 million following strong performances in both Vitality UK and Ping An Health Insurance.

The business-specific highlights include:

• VitalityHealth UK increased operating profit by 65% to £83.6 million.
• VitalityLife UK increased operating profit by 27% to £34.5 million, with new business increasing 25%.
• Vitality Global Markets continued to make progress despite adverse currency and macroeconomic impacts.
• Post the year end, VitalityHealth USA finalised the acquisition of Icario, which covers 11 million lives, to accelerate and complement its capability for the large Government-sponsored market.
• Ping An Health Insurance (PAHI) increased Discovery's share of after-tax operating profit by 9% to R1 317 million, with insured lives increasing 10% to 35.4 million.

Gore concluded, “With strong momentum across all businesses, growing financial flexibility and continued innovation in our Shared-value model, I believe we are well positioned to deliver sustainable growth, stronger earnings and long-term value for all our stakeholders.”

The Group declared a final ordinary dividend of 273 cents per share for the year, up 36% on the prior period.

ENDS