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FirstRand First National Bank (FNB) and Investec and are seen as the banks most vulnerable to the impending public launch of Discovery Bank in March next year.

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Investec, which focuses on wealthy private clients, was vulnerable as there was a significant overlap between its clients and those of Discovery, the analyst said. Discovery would likely target young professionals, which was a key market for Investec.

The launch canada goose outlet winnipeg address of Discovery Bank is also likely canada goose outlet parka to strike at the heart of the country retail business sector with Absa, Nedbank and Standard Bank also likely to feel some pressure too.

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He added that Discovery is targeting the affluent Discovery is going the digital banking route, with no branches, once the bank has achieved a certain level of scale it can easily move to the mass market.

Capitec, which has been rapidly growing its transactional banking business and has a cheap banking offering with high interest hotcanadagoose offered on cash deposits, is likely to canada goose outlet mississauga be the least affected for now because it appeals to the broad mass market, which Discovery Bank doesn appear to want to go after.

The Discovery Group on Wednesday launched its first foray into the banking sector, with its eye on the 2.3 million customers it already has within its fold as potential clients.

Discovery chief executive Adrian Gore said during a media conference in Sandton, Johannesburg, that the group had about 2 million adult customers and it was looking to bring 300 000 people that hold Discovery credit cards to its bank, which holds R622 million in assets, according to a statement by the Banking Association of SA in June this year.

Adrian Cloete, a banking analyst at PSG Wealth, said he expected Discovery Bank to be a bank that will go for wealthy clients who have at least a medical aid account.

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It is vital that the new bank attracts and employs good bankers. The bank will also need to allow new clients to easily join as people don like changing banks.

Cloete said Discovery Bank would enjoy a number of advantages, including having the latest upgrades to banking technology; a significant financial position; being part of a group that has a history of innovation; being an part of an established brand; and a management team with a reputation for successfully disrupting the market.

An immediate possible disadvantage for the bank is that it is launching during a recession.

Liam Hechter, a fund manager at Johannesburg based Anchor Capital, said it was critical for Discovery Bank to convert its clients, especially the credit card holders, into banking customers and to evolve into a full scale bank over time.

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Gore said Discovery Bank would be the first behaviour bank It will draw on its Discovery Health Vitality loyalty plan and medical aid.

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Many existing Vitality members are likely to be attracted to Discovery Bank to seek more rewards, an analyst said.

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Nedbank generates much of its profit from its business unit, while Absa and Standard Bank have significant interests in the rest of Africa.

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The bank is one of a host of new entrants in the local banking sector, including Tyme Digital, Bank Zero and the SA Postbank. African Bank will also launch its transaction banking offer next year.

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