Israel Discount Bank (DSCT) investor relations material

Executive summary

• Q2 net profit was NIS 1,203m, up 7.9% YoY and 29.4% QoQ; ROE was 14.0%, or 15.4% excluding one-offs.

• H1 net profit was NIS 2,133m, down 0.8% YoY; adjusted profit was NIS 2,361m, nearly flat YoY.

• Net credit to the public grew 5.4% from year-end to NIS 304,478m; CET1 was 10.27% and LCR was 122.3%.

Financial highlights

• Q2 total revenue was NIS 3,123m, down 10.5% YoY and 9.9% QoQ; net interest income was NIS 2,309m, down 13.1% YoY and 9.2% QoQ.

• H1 net interest income fell 4.4% YoY to NIS 4,852m; net financing income declined 3.6% to NIS 5,427m.

• H1 credit-loss expense rose to NIS 252m from NIS 112m; fees and commissions increased 10.7% to NIS 1,156m.

• H1 operating and other expenses fell 5.1% YoY to NIS 3,033m; profit before tax declined 3.7% to NIS 3,304m.

• H1 total assets were NIS 483,460m, up 1.1% from year-end; deposits rose 0.5% to NIS 361,422m.

Outlook and guidance

• Discount 2030 targets net profit above NIS 5.2bn, an efficiency ratio below 43%, ROE of at least 13%-14%, and dividends of up to 50% of net profit.

• Cost reduction and digital transformation remain priorities; 477 FTEs signed early-retirement plans against a 600-FTE year-end target.

• A 1% rate decrease is estimated to reduce interest income by NIS 727m; lower inflation may also reduce income from CPI-linked assets.