Israel Discount Bank Limited Class A · TASE:DSCT

Israel Discount Bank Limited Class A — Q3 2016 Earnings Presentation

28 slides from Israel Discount Bank Limited Class A's earnings presentation, Nov 17, 2016

  1. Slide 1: Q3-16 Financial Results Conference Call

    Israel Discount Bank Q3-16 Financial Results Conference Call November 17, 2016 1

  2. Slide 2: Q3-16 Profit & Loss

    Q3-16 Profit & Loss (NIS m) Change compared to: P&L Q3-15 Q2-16 Q3-16 Q3-15 Q2-16 Interest income, net 1,067 1,155 1,187 11.2% 2.8% Loan loss provision 85 58 141 65.9% 143.1% Non-interest financing income 30 428 51 70.0% (88.1%) Commissions 650 633 675 3.8% 6.6% Other income 42 27 5 (88.1%) (81.5%)

  3. Slide 3: 9M-16 Profit & Loss

    9M-16 Profit & Loss (NIS m) P&L 9M-15 9M-16 % Change Interest income, net 3,182 3,399 6.8% Loan loss provision 89 245 175.3% Non-interest financing income 317 575 81.4% Commissions 1,962 1,932 (1.5%) Other income 78 94 20.5% Total non-interest income 2,357 2,601 10.4% Total non-interest income adjus

  4. Slide 4: Q3-16 & 9M-16 Balance Sheet and Ratios

    Q3-16 & 9M-16 Balance Sheet and Ratios (NIS m) Change compared to: Balance Sheet Q3-15 Q2-16 Q3-16 Q3-15 Q2-16 Total assets 206,914 208,882 213,451 3.2% 2.2% Credit to the public, net 123,592 133,092 139,315 12.7% 4.7% Securities 39,251 38,053 37,491 (4.5%) (1.5%) Deposits from the public 153,068 16

  5. Slide 5: Highlights of Q3-16 Results

    Highlights of Q3-16 Results 5

  6. Slide 6: Q3-16 Highlights

    Q3-16 Highlights o CET-1 of 9.8%, positively impacted by capital raising, which contributed 0.4% o Public offering of shares and warrants at the amount of NIS 580 m (gross), NIS 763 m Infrastructure assuming full exercise of warrants o LCR at 129.7%, LR at 6.7% o Robust asset quality o Expansion of

  7. Slide 7: Strong Capital Position Ahead of BOI Threshold

    Strong Capital Position Ahead of BOI Threshold Infrastructure Basel III CET-1 ratio Comparison of CET-1 ratio, Q2-16 Basel III CET-1 ratio Jan 2017 requirement by BOI Board of directors target 10.86% 9.2% BOI Threshold 10.81% for Jan 2017 10.75% 10.5% 10.27% 10.2% 10.0% 10.0% 10.1% 9.85% 9.8% 9.4% 9

  8. Slide 8: Capital Increase Due to the Capital Raising Allowed us to Enhance Credit Growth

    Capital Increase Due to the Capital Raising Allowed us to Enhance Credit Growth Infrastructure Capital raising rational: Main factors impacting CET-1 ratio  We have identified an opportunity to significantly enhance the planned growth pace in the next few quarters, without harming -0.27% margins &

  9. Slide 9: Robust Liquidity and Leverage Position

    Robust Liquidity and Leverage Position Infrastructure Liquidity Coverage Ratio (LCR) Comparison of LCR, Q3-16 BOI Threshold for Jan ‘17 131.5% 128.0% 133.9% 133.9% 129.7% 129.7% 130.0% 117.0% 105.0% 109.0% 100% Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 MZTF FIBI POLI DSCT LUMI Leverage Ratio (LR) Comparison of

  10. Slide 10: Robust Credit Quality

    Robust Credit Quality Infrastructure (NIS m) Loan loss provision LLP ratio 0.42% 0.49% 0.24% 0.18% 0.14% 0.14% 0.15% 580 141 245 164 187 46 58 2013 2014 2015 9M-16 Q1-16 Q2-16 Q3-16 Key asset quality indicators Total Problematic Credit Risk Allowance for LLPs/ Impaired Loans Impaired Substandard Spe

  11. Slide 11: Continued Cost Restraint

    Continued Cost Restraint Cost (NIS m) Total Expenses, Group -0.4% 0.7% 1,420 1,414 1,404 1,414 306 7.2% 328 295 11.2% 328 294 272 268 1.5% 272 -7.5% 820 -0.7% 814 841 -3.2% 814 Q3-15 Q3-16 Adj. ** Q2-16 Adj. * Q3-16 Adj. ** Maintenance & Salary & Related Depreciation Other * Excluding a NIS 20 m bon

  12. Slide 12: Continued Credit Growth in Targeted Segments

    Continued Credit Growth in Targeted Segments Growth (NIS bln) Credit balances growth by segments Mortgages Consumer credit* Micro & small enterprises 17.1% 14.9% 16.2% 16.7% Total Credit 12.5% 11.8% 6.6% 12.7% 6.3% 4.3% 9.5% YoY YTD QoQ YoY YTD QoQ YoY YTD QoQ 4.7% Medium enterprises Corporate 9.8%

  13. Slide 13: Fastest Credit Growth in the Sector

    Fastest Credit Growth in the Sector Growth Credit Balances (gross), Israeli Banks Total credit Consumer credit* 12.7% 16.2% 11.6% 11.4%12.1% 6.7% 4.7% 6.9% 6.3% 4.6% 1.9% 2.6% 3.2% 3.5% 1.5% 2.1% 0.7% 0.4% -0.6% -0.4% YoY QoQ YoY QoQ Small businesses Mortgages 16.7% 17.1% 7.7%8.5% 5.8% 6.6% 4.6% 5.5

  14. Slide 14: Robust Performance of Subsidiaries

    Robust Performance of Subsidiaries Subsidiaries (NIS m) (USD m) 74.7% 11.4% 192 7.3% 9.6% 6.8% 18.0% 16.7% 8.7% 60 15 15 5.2% 56 14.8% 48 51 12 45 42 3.4% 11 Q3-15 Q2-16 Q3-16 Q3-15 Q2-16 Q3-16 Q3-15 Q2-16* Q3-16 ** Net income ROE Net income adjusted ROE adjusted * Excluding NIS 263 m income from th

  15. Slide 15: IDB NY

    IDB NY Subsidiaries (USD m) Change compared to: P&L and Balance Sheet Q3-15 Q2-16 Q3-16 Q3-15 Q2-16 Net interest income 42 48 48 13.2% 0.3% Loan loss provision 0 8 12 13853.5% 57.9% Non-interest income 13 14 17 27.0% 19.6% Operating & other expenses 36 36 37 2.3% 3.2% Income before tax 19 18 16 (18.

  16. Slide 16: Mercantile

    Mercantile Subsidiaries Change compared to: (NIS m) P&L and Balance Sheet Q3-15 Q2-16 Q3-16 Q3-15 Q2-16 Net interest income 220 228 238 8.2% 4.4% Loan loss provision 20 19 7 (65.0%) (63.2%) Non-interest income 96 85 89 (7.3%) 4.7% Operating & other expenses 225 225 223 (0.9%) (0.9%) Income before ta

  17. Slide 17: CAL

    CAL Subsidiaries Change compared to: (NIS m) P&L and Balance Sheet Q3-15 Q2-16 Q3-16 Q3-15 Q2-16 Credit card transactions 241 242 262 8.7% 8.3% Net interest income 76 90 95 25.0% 5.6% Non-interest financing income 3 265 4 33.3% (98.5%) Non-interest financing income adjusted 3 2(1) 4 33.3% 100.0% Tot

  18. Slide 18: Continuous Effort to Improve Organizational Culture

    Continuous Effort to Improve Organizational Culture Culture Advanced stage of negotiations with labor unions  Headed by Head of HR  Focused on:  Wage agreement for the coming years  Labor agreement framework 18

  19. Slide 19: Strategic Update

    ISRAEL — DISCOUNT AN BANK , Strategic Update 19

  20. Slide 20: Our Updated 5-Year Strategy with Focus Areas for 2016

    Our Updated 5-Year Strategy with 5 Focus Areas for 2016 Accelerate cost 1 reduction plan Relentless Execution Enhance 2 retail growth Reduce & Grow Retail Simplify Build platform for Costs 3 future banking Focus Realize subsidiaries’ Change 4 potential Culture Strengthen organizational 5 culture cha

  21. Slide 21: Accelerate Cost Reduction Plan Total Decrease of 20% in Workforce

    1 Accelerate Cost Reduction Plan Total Decrease of 20% in Workforce Decrease in workforce, Group  Cost reduction Number of employees (in terms of positions) program is well on Original plan – executed Expanded plan  Early retirement of 500 employees ; track. over 250 employees had already signed t

  22. Slide 22: Enhance Retail Growth – Capital Raising Allowing us to Accelerate Growth

    2 Enhance Retail Growth – Capital Raising Allowing us to Accelerate the Pace of Growth, Particularly in Targeted Segments Total credit growth Consumer credit growth Mortgages growth SME growth 14.9% 12.5% 11.8% 9.5% 7.8% 7.2% 4.6% 5.9% 6M-16 9M-16 6M-16 9M-16 6M-16 9M-16 6M-16 9M-16 Growth has been

  23. Slide 23: Enhancing Cost Reduction & Revenue Growth Levers

    2 Enhancing Cost Reduction & Revenue Growth Levers is Aimed at Increasing Financial Performance & Closing the Gap Faster Reducing cost of revenue-generating platform o Ongoing effort to maintain cost flat o 1st cost reduction plan reduced the workforce by 1,000 employees, 3 years ahead of time o 2nd

  24. Slide 24: Enhance Retail Growth – Continue to Improve Productivity

    2 Enhance Retail Growth – Continue to Improve Productivity Expansion of back office Improved automated and simplified processes Management of incoming calls  Wave I, which is focused on improving Queue management and express service banker sales and service Improved sales and management routines ef

  25. Slide 25: Build Platform for Future Banking – Discount Bank in 2020

    3 Build Platform for Future Banking – Discount Bank in 2020  We have revised our strategy to better address potential future changes and to Main goal: Collaboration with FinTech companies facilitate building a platform to enhance our value proposition for future banking  Our main focus remains tra

  26. Slide 26: THANK YOU !

    ISRAEL THANK YOU !

  27. Slide 27: Thank you. Stay Tuned.

    Thank you. Stay Tuned. http://www.discountbank.co.il/IR Subscribe to receive email alerts. IR Contact: Tamar Koblenz Tamar.koblenz@dbank.co.il +972-3-5144496 27

  28. Slide 28: Disclaimer

    Disclaimer This document has been prepared by Israel Discount Bank Ltd. (the “Bank”) solely for use by the Bank in its presentation of its Q3-16 reports, as well as in strategic updates referred to in the Bank’s reports. The information contained herein may be partial. It is emphasized that this pre

Israel Discount Bank — Q3 2016 Earnings Presentation on 6ix