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Mediclinic News : Discovery expands into banking

Title

Discovery expands into banking

Date

2018-07-23

Link

News Description

Daily Dispatch Adrian Gore's Discovery has enjoyed rapid growth since its inception some 26 years ago, broadening its product offering beyond medical aid into insurance and financial products and, this year, banking. The company's diversification away from its core healthcare product is drawing more intense investor interest as the long term prospects for that business are muddied by the impending National Health Insurance (NHI) . So pervasive has Discovery Health's growth been that the recently completed Health Market Inquiry, which looked into competition in the private healthcare market, described it as "an indication of market failure" and that the market showed no signs of self-correcting. The company, founded by Gore and a colleague in 1992 after leaving Liberty Holdings, is made up of a medical aid arm, life insurance, a Vitality health programme and some other financial products. Its insurance arm has already overtaken its healthcare business, and, according to Bloomberg data, makes up more than 50% of the company's revenue. As part of its ever evolving and diversifying business, the firm is set to launch Discovery Bank this year. The bank will face stiff competition from existing banks as well as the soon to be launched TymeDigital bank, owned by the Commonwealth Bank of Australia, and former FNB CEO Michael Jordaan's Bank Zero. Wayne McCurrie from FNB Wealth and Investments said healthcare companies were unlikely to feel the impact of the NHI for about a decade. McCurrie said Discovery had a loyal customer base in South Africa, to which it is now cross selling its other products. However, banking might be a tough nut for Discovery to crack. "The problem with Discovery is they don't have enough capital to truly be a big player in the banking market," he said, adding the bank might start small and to truly become big, would need to raise capital by selling shares.
Created at 2018/08/01 09:31 AM by Mediclinic
Last modified at 2018/08/01 09:31 AM by Mediclinic