Israel Discount Bank (DSCT) Q3 2024 earnings summary

Executive summary

• Q3 net profit was NIS 1,137m, up 39.2% YoY and 8.8% QoQ; ROE was 14.9%.

• Nine-month net profit was NIS 3,232m, down 1.3% YoY; adjusted profit was NIS 3,388m, up 5.7%.

• Credit grew 3.2% QoQ and 7.2% YoY, with growth across segments; NPL ratio declined to 0.76%.

• Q3 dividend and buyback totaled 40% of quarterly net profit.

Financial highlights

• Q3 total income rose 5.0% QoQ and 7.2% YoY; net interest income increased 0.7% QoQ and 5.8% YoY to NIS 2,865m.

• Q3 non-interest income rose 10.0% YoY to NIS 1,360m; credit-loss expense declined 54.0% to NIS 274m.

• Adjusted Q3 net income was NIS 1,198m, up 46.6% YoY, reflecting identified special items including a one-time tax and Visa Europe sale.

• Nine-month net interest income fell 1.6% YoY to NIS 8,248m as interest expenses rose 19.2% to NIS 8,427m, largely due to higher deposit costs.

• Nine-month credit-loss expense fell 44.8% YoY to NIS 614m; operating and other expenses rose 3.0% to NIS 6,124m.

Outlook and guidance

• GDP growth was projected at 3.5% for 2025, contingent on easing tensions; management expected recovery after a war-related slowdown in 2024.

• The Bank of Israel policy rate was held at 4.5%; the report anticipated no cut before the end of Q3 2025 amid inflation and geopolitical uncertainty.

• Deposit margins may face pressure if customers shift funds from non-interest-bearing current accounts to interest-bearing deposits.