South African insurer Discovery Ltd. said it is on track to launch its own bank within the year after it agreed to acquire FirstRand Ltd.'s 25.01% stake in unit Discovery Bank.
The stake, along with all economic interests and rights of Discovery Card, are being sold for a total combined acquisition price of 1.8 billion rand.
The transaction will be funded by an equity issuance limited to the purchase price.
"Although these developments have delayed the process slightly, the bank build is progressing well and remains within budget and on track to launch within 2018," the insurer said Sept. 4.
Discovery, which was granted a South African banking license in October 2017, noted that the license was granted on the condition that FirstRand's stake in Discover Bank is reduced over time.
As of Sept. 4, US$1 was equivalent to 15.25 South African rand.