Israel Discount Bank Limited Class A · TASE:DSCT
Israel Discount Bank Limited Class A — Q3 2023 Earnings Presentation
24 slides from Israel Discount Bank Limited Class A's earnings presentation, Nov 27, 2023
Slide 1: 3Q 2023 Review: Financial Highlights
3Q 2023 REVIEW Financial Highlights Investor Relations November 27, 2023
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 3rd 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 2023 3rd quarter fin
Slide 3: Agenda
AGENDA Opening Remarks and Financial Review Asaf Pasternak, CFO 3
Slide 4: 3Q 2023 – Consistent Performance Amidst Market Turbulence
3Q 2023 – CONSISTENT PERFORMANCE AMIDST MARKET TURBULENCE NET INCOME ROE EFFICIENCY RATIO 817M 12.0% 51.8% DIVIDEND PAYOUT NII GROWTH CREDIT GROWTH QoQ / YoY QoQ / YoY 15% -7.7% / 18.7% 2.2% / 9.3% 4
Slide 5: Our Commitment - To Support the Israeli Economy and Stand by Our Customers
OUR COMMITMENT - TO SUPPORT THE ISRAELI ECONOMY AND TO STAND BY OUR CUSTOMERS Discount extended BOI aid outline The bank took proactive measures to offer substantial aid to its customers, implementing a range of benefits to alleviate financial hardships. Granted full exemption from the mortgage paym
Slide 6: The Bank Enters the Current Situation with Solid Fundamentals
THE BANK ENTERS THE CURRENT SITUATION WITH SOLID FUNDAMENTALS Branches and banking services are fully operational. Ample liquidity- LCR 136% ; Solid CET-1 10.36%. Dividend payout has been temporarily reduced to 15%, to bolster future growth. The local capital market demonstrates resilience, largely
Slide 7: Possible Consequences of the War on the Economy - Initial Reference
POSSIBLE CONSEQUENCES OF THE WAR ON THE ECONOMY - INITIAL REFERENCE Israel’s GDP Growth (%) is expected to slowdown in 2024* Bank of Israel’s Rate has increased to 4.75% in May 2023 and expected to decrease in 75bps** 4.75 (%) 4.25 4.00 3.75 3.25 3.50 *** 0.10 Jan22 May22 Aug22 Oct22 Dec22 Feb23 Dec
Slide 8: 3Q23 and 9M23 Highlights
3Q23 AND 9M23 HIGHLIGHTS Net income of NIS 817m and ROE of 12.0% in 3Q23, decrease in revenue from NII and higher group basis provision for credit loss expenses. Higher group provisions: As expected, credit loss expenses ratio mounted to 0.92% driven mainly by increase group provisioning to reflect
Slide 9: Well Balanced Credit Growth in Focused Segments
WELL BALANCED CREDIT GROWTH IN FOCUSED SEGMENTS Total Credit Well Balanced Loan Book Mortgages * Medium Enterprises in NIS bn; growth % in NIS bn; growth % in NIS bn; growth % 9.3% 8.9% 13.6% 1.6% 2.3% 2.2% Small Enterprises Corporates in NIS bn; growth % in NIS bn; growth % -0.2% 21.4% -1.3% 2.9% I
Slide 10: Total Income Fundamentals Remain Solid Although NII Is Impacted by Increased CoF
TOTAL INCOME FUNDAMENTALS REMAIN SOLID ALTHOUGH NII IS IMPACTED BY INCREASED COF Total Income Financing Income From Current Operations (NIS m) NIS m 3Q23 ver. 2Q23 3Q23 ver. 3Q22 Period end BOI rate 2.00% 3.25% 4.25% 4.75% 4.75% -3.5%% 19.2% Average BOI rate* 1.53% 2.92% 3.89% 4.58% 4.75% 22.3% -4.7
Slide 11: Increasing Maintenance Costs While Maintaining a Positive Long-Term Jaws Ratio
INCREASING MAINTENANCE COSTS WHILE MAINTAINING A POSITIVE LONG-TERM JAWS RATIO Total Expenses Cost Income Ratio Is maintained low Due To Positive Jaws NIS m 3Q23 ver. 2Q23 3Q23 ver. 3Q22 5.4% 11.8% 70.4% 62.0% 55.2% 51.8% 4.2% 7.8% JAWS 2Q23 12.5% 17.8% 24.3% JAWS 11.3% 1.9% 10.3% Other Maintenance
Slide 12: Prudent Handling of Credit Loss Expenses While the NPL Ratio Remains Consistent
PRUDENT HANDLING OF CREDIT LOSS EXPENSES WHILE THE NPL RATIO REMAINS CONSISTENT Group Basis Provision drives most of the overall Credit Steady NPL/Total Credit* Ratio Loss Expenses (in NIS m and %) 9M23 0.58% Ample allowance for Loan Loss Provisions from Total Credit** Group Basis Specific Basis 12
Slide 13: Robust and Diversified Funding Base and Ample Liquidity
ROBUST AND DIVERSIFIED FUNDING BASE AND AMPLE LIQUIDITY Diversified domestic public deposit base with high share of Shifting from non-bearing deposits to time-deposits households deposits 30.9.23 NIS m Non-interest bearing demand deposit Private Individuals Interest bearing demand deposit 46% Total
Slide 14: Solid Performance Across Our Subsidiary Companies
SOLID PERFORMANCE ACROSS OUR SUBSIDIARY COMPANIES 19.3% 23.7% 17.1% 16.4% 15.4% 13.2% In NIS m YoY growth in In NIS m 6.5% Total credit YoY growth in 13.0% Credit card transactions ROE Cost income ROE Net income 40.4% ratio Net income YoY growth in as reported as reported 15.8% consumer credit Adj.
Slide 15: CET-1 Capital Ratio Is Effectively Protected Against Market Volatility
CET-1 CAPITAL RATIO IS EFFECTIVELY PROTECTED AGAINST MARKET VOLATILITY Growing our buffer Effect of 1.00% change on CET-1 ratio* Total Capital Ratio & Tier I Capital Ratio (% , selected, separated scenarios) 13.13% 0.00% QoQ 10.3 6% 10.25% 10.36% 10.33% 10.16% -0.02% 1.17 (0.11%) (0.001%)- (0.03%) 0
Slide 16: To Summarize
TO SUMMARIZE Stable results for 3Q23, with net income of 817M NIS, and ROE of 12.0%. Responsible credit growth, with asset quality remaining solid – Credit growth of 2.2%, in targeted segments. Increase in group credit loss expenses reflects our prudent risk approach, while credit portfolio quality
Slide 17: Agenda: Q&A
AGENDA Q&A Asaf Pasternak, CFO Yossi Beressi, Chief Accountant 17
Slide 18: Appendices
APPENDICES space olgeoonT
Slide 19: Israel Discount Bank: Adjusted P&L and Selected Ratios
ISRAEL DISCOUNT BANK: ADJUSTED P&L AND SELECTED RATIOS NIS m 3Q23 2Q23 3Q22 vs.2Q23 vs.3Q22 9M23 9M22 change Net interest income 2,707 2,934 2,280 (7.7%) 18.7% 8,381 6,153 36.2% Credit loss expenses 596 312 106 91.0% 462.3% 1,112 177 528.2% Non-interest financing income 312 282 151 10.6% 106.6% 923
Slide 20: Israel Discount Bank: Selected Balance Sheet Items
ISRAEL DISCOUNT BANK: SELECTED BALANCE SHEET ITEMS NIS m 30.09.23 30.06.23 30.09.22 Cash and deposits with banks 57,552 56,696 71,510 Securities 52,380 54,537 42,633 Securities borrowed or purchased under agreements to resell 1,150 1,024 1,271 Credit to the public 262,463 256,768 240,032 Provision f
Slide 21: Israel Discount Bank: Adjustments to P&L
ISRAEL DISCOUNT BANK: ADJUSTMENTS TO P&L Quarter ended at 30 September NIS m NIS m 3Q23 2Q23 3Q22 Reported net income 817 1,187 893 Profit from the sale of rights in Visa Europe - - (20) Effect of settlement 11 Total - - 11 Adjusted net income 817 1,187 884 21
Slide 22: Mercantile: Financial Performance
MERCANTILE: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios NIS m 3Q23 2Q23 3Q22 Vs. 2Q23 Vs. 3Q22 9M23 9M22 Change Net interest income 577 608 452 (5.1%) 27.7% 1,748 1,225 42.7% Non-interest income 104 111 101 (6.3%) 3.0% 324 279 16.1% Total income 681 719 553 (5.3%) 23
Slide 23: IDBBank: Financial Performance
IDBBANK: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios USD m 3Q23 2Q23 3Q22 Vs. 2Q23 Vs. 3Q22 9M23 9M22 Change Net Interest Income 82 86 92 (4.7%) (10.9%) 255 243 4.9% Non-Interest Income 21 17 17 23.5% 23.5% 55 55 - Total Income 103 103 109 - (5.5%) 310 298 4.0% Opera
Slide 24: CAL: Financial Performance
CAL: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios NIS m 3Q23 2Q23 3Q22 Vs. 2Q23 Vs. 3Q22 9M23 9M22 Change Income From Credit Card Transactions 480 447 434 7.4% 10.6% 1,350 1,223 10.4% Credit Loss Expense 93 53 28 75.5% 232.1% 187 54 246.3% Non-Interest Financing Incom