Israel Discount Bank Limited Class A · TASE:DSCT
Israel Discount Bank Limited Class A — Q2 2024 Earnings Presentation
25 slides from Israel Discount Bank Limited Class A's earnings presentation, Aug 15, 2024
Slide 1: 2Q 2024 Review: Financial Highlights
2Q 2024 REVIEW Financial Highlights Investor Relations AUGUST 15, 2024
Slide 2: 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 2nd quarter report, as well as in strategic updates referred to in the Bank’s reports. This presentation is not a substitute for the Bank’s 2024 2nd quarter fin
Slide 3: 2Q 2024 – Delivering Stable Performance
2wQ er 2024 –numVERING STABLE PERFORMANCE NET INCOME ROE EFFICIENCY RATIO 1,045 M 14.1% 51.3% Banking in Israel * 923M 17.7%** 43.6%** DIVIDEND PAYOUT NII GROWTH CREDIT GROWTH QoQ / YoY QoQ / YoY 30% 12.2% / -3.0% 2.5% / 6.1% ** Consolidated figures for banking operations of Discount & Mercantile **
Slide 4: The Economy Is Gaining Momentum
THE ECONOMY IS GAINING MOMENTUM Housing Market shows strong signs of recovery Private Consumption in Credit-Cards (Sales in units) is now surpassing pre-war levels (Jan 2023 = 100) May 24 Total Clothing Leisure Flights & Tourism Source: CBS, Aug 2024
Slide 5: The Economy Is Gaining Momentum
THE ECONOMY IS GAINING MOMENTUM Israeli Tech Sector’s Capital-Raise Job market shows resilience and strength** signals continued turnaround* (%) (Total $mil, of Rounds) 2023 2024 Number of deals Total capital raised $ mil Unemployment Unemployment Economic reasons 5 * Source: IVC 2Q24 Report ** Sour
Slide 6: But High-Tech Services Export Is Slowing Down
BUT HIGH-TECH SERVICES EXPORT IS SLOWING DOWN AND WORKING HOURS REMAIN STAGNANT Job Growth Continues, But Total Working Hours is stagnant High-Tech Services Exports faces deceleration (January 202 = 100) (Annual Growth Rate in %) Jobs Total Hours Source: CBS, Aug 2024
Slide 7: Sharp Increase in Govt. Deficit Opens the Spread in the Bond Market
AND SHARP INCREASE IN GOVT. DEFICIT OPENS THE SPREAD IN THE BOND MARKET Fiscal Deficit widens Opening of the 10Y Spread – US vs. Israel Bond (spread in bps) Dec 20 Sept 23 July 24 Dec 22 Gov. Expenses Gov. Revenue Deficit (%) US$ vs. ISR ILS (Sheqel) US$ vs. ISR$ Source: Ministry of Finance data (Ap
Slide 8: BOI Rate Expected to Decrease During 2025
BOI RATE EXPECTED TO DECREASE DURING 2025 INFLATION IS ANTICIPATED TO STAY WITHIN UPPER LIMITS Bank of Israel holds Interest Rate - Commencing the cutting will Inflation is projected to stay above upper range of BoI target take more time than initially expected (CPI Contracts for Dec 2024, %) (Marke
Slide 9: 2Q24 and 1H24 Financial Highlights
2Q24 AND 1H24 FINANCIAL HIGHLIGHTS Net income of NIS 1,045m and ROE of 14.1% in 2Q24, driven by higher NII, supported by effect of CPI and increase in Fees & commissions. Increase in collective allowance: Credit loss expenses ratio stood at 0.38% due to a higher Collective Allowance provisioning as
Slide 10: Credit Growth Is Rebounding – Demand Across All Segments
CREDIT GROWTH IS REBOUNDING – DEMAND ACROSS ALL SEGMENTS Total Credit Well Balanced Loan Book Mortgages Medium Enterprises in NIS bn; growth % in NIS bn; growth % in NIS bn; growth % 6.1% 5.1% 5.3% 1.8% 1.1% 2.5% 70.2 71.4 67.9 2Q23 1Q24 2Q24 Small Enterprises Corporates in NIS bn; growth % in NIS b
Slide 11: Credit Loss Expenses Remain Within Normal Range; NPL Ratio Decreasing
CREDIT LOSS EXPENSES REMAIN WITHIN NORMAL RANGE NPL RATIO IS GRADUALLY DECREASING Collective Allowances within normal range Steady improvement in NPL/Total Credit* Ratio while Specific basis provision decrease 0.91% (in NIS m and %) 0.83% 0.84% 0.86% 0.83% 2Q23 3Q23 4Q23 1Q24 2Q24 Allowance for Loan
Slide 12: Increase in Total Income Driven Mainly by Net Interest Income
INCREASE IN TOTAL INCOME DRIVEN MAINLY BY NET INTEREST INCOME Total Income Financing Income From Current Operations (NIS m) NIS m 2Q24 ver. 1Q24 2Q24 ver. 2Q23 Period end BOI rate 4.25% 4.75% 4.75% 4.50% 4.50% Average BOI rate* 3.89% 4.58% 4.75% 4.51% 4.50% 7.1% -1.5% -5.5% 2.4% 6.0% 4.9% 2,908 2,77
Slide 13: Salary & Maintenance Expenses Are Contained as Other Expenses Rise
SALARY & MAINTENANCE EXPENSES ARE CONTAINED AS OTHER EXPENSES RISE Total Expenses NIS m Cost Income Ratio 47.5% 51.8% 53.4% 52.8% 51.3% 6.5% 4.1% Other Maintenance and depreciation Salary & related 13
Slide 14: Robust and Diversified Funding Base with Strong Capital Ratio
ROBUST AND DIVERSIFIED FUNDING BASE WITH STRONG CAPITAL RATIO Diversified domestic public deposit base Sustaining continual stability across the group with high share of households deposits 30.6.24 NIS m Non-interest bearing demand deposit Institutional bodies Interest bearing Households demand depo
Slide 15: Discount Is About to Acquire Full Ownership of Paybox
DISCOUNT ISPAYBOX ABOUT TO ACQUIRE FULL OWNERSHIP OF PAYBOX Acquiring complete Ownership of PayBox as part of our strategy to establish it as a significant non-bank provider Separate and independent company with entrepreneurial DNA. Deposits Unique active users With more than 1.4 m unique users, Pay
Slide 16: Discount Has Entered into Agreement to Sell ~15% of IDBNY to Gallatin Point Capital
DISCOUNT HAS ENTERED INTO AGREEMENT TO SELL PAYBOX ~ 15% OF IDBNY TO GALLATIN POINT CAPITAL Discount signed an agreement with the American investment fund Gallatin Point Capital for the sale of approximately 15% of the shares of IDBNY a strategic move to improve the bank’s business growth. Leveragin
Slide 17: Contribution to Profit from Key Subsidiaries
CONTRIBUTION TO PROFIT FROM KEY SUBSIDIARIES 23.7% 14.7% 17.9% 14.2% 13.2% 12.6% In NIS m YoY growth in In NIS m 7.4% Total credit YoY growth in 82 81 81 11.7% Credit card transactions ROE Cost income ROE Net income 42.4% Ratio 1H24 Net income YoY growth in as reported as reported 1.4% consumer cred
Slide 18: To Summarize
TO SUMMARIZE Solid & continuous results for 2Q24, with net income of 1,045 NIS, and ROE of 14.1%. Credit growth is gaining momentum, aligned with the economy, with asset quality remaining solid – Credit growth of 2.5%, attributed to Corporates & Mortgages. The economy demonstrated resilience & growt
Slide 19: Appendices
APPENDICES 19
Slide 20: Israel Discount Bank: P&L and Selected Ratios
ISRAEL DISCOUNT BANK: P&L AND SELECTED RATIOS NIS m 2Q24 1Q24 2Q23 vs.1Q24 vs.2Q23 Net interest income 2,846 2,537 2,934 12.2% )3.0%( Credit loss expenses 258 82 312 214.6% )17.3%( Non-interest financing income 264 358 282 )26.3%( )6.4%( Commissions 912 860 869 6.0% 4.9% Other income 1 2 - )50.0%( #
Slide 21: Israel Discount Bank: Selected Balance Sheet Items
ISRAEL DISCOUNT BANK: SELECTED BALANCE SHEET ITEMS NIS m 30.6.24 31.12.23 30.6.23 Cash and deposits with 46,404 51,115 56,696 banks Securities 60,634 59,268 54,537 Securities borrowed or purchased under 983 851 1,024 agreements to resell Credit to the public 272,558 262,941 256,768 Provision for cre
Slide 22: Israel Discount Bank: Adjustments to P&L
ISRAEL DISCOUNT BANK: ADJUSTMENTS TO P&L NIS m 2Q24 1Q24 2Q23 Reported net income 1,045 1,050 1,187 Realization of assets 34 50 - Provisions stemming from the separation of ICC 11 - - Total - - Adjusted net income 1,090 1,100 1,187 22
Slide 23: Mercantile: Financial Performance
MERCANTILE: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios mercantile NIS m 2Q24 1Q24 2Q23 Vs. 1Q24 Vs. 2Q23 Net interest income 580 528 608 9.8% )4.6%( Non-interest income 99 111 111 )10.8%( )10.8%( Total income 679 639 719 6.3% )5.6%( Operating & other expenses 282 27
Slide 24: IDBBank: Financial Performance
IDBBANK: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios IDB Bank USD m 2Q24 1Q24 2Q23 Vs. 1Q24 Vs. 2Q23 Net Interest Income 79.0 81.0 86.2 (2.5%) (8.4%) Non-Interest income (Expenses) 21.0 18.0 16.7 16.7% 25.7% Total Income 100.0 99.0 102.8 1.0% (2.7%) Operating & Other
Slide 25: CAL: Financial Performance
CAL: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios CAL NIS m 2Q24 1Q24 2Q23 Vs. 1Q24 Vs. 2Q23 Income From Credit Card Transactions 479 438 447 9.4% 7.2% Credit Loss Expense 67 40 53 67.5% 26.4% Non-Interest Financing Expenses 8 5 - 60.0% #VALUE! Total Income 713 663 65