Israel Discount Bank Limited Class A · TASE:DSCT

Israel Discount Bank Limited Class A — Q1 2016 Earnings Presentation

22 slides from Israel Discount Bank Limited Class A's earnings presentation, May 19, 2016

  1. Slide 1: Q1-16 Financial Results Conference Call

    Israel Discount Bank Q1-16 Financial Results Conference Call May 19, 2016 1

  2. Slide 2: Q1-16 Profit & Loss

    Q1-16 Profit & Loss (NIS m) Change compared to: P&L Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Interest income, net 1,020 1,043 1,057 3.6% 1.3% Loan loss provision 32 98 46 43.8% (53.1%) Non-interest financing income 185 46 96 (48.1%) 108.7% Commissions 657 649 624 (5.0%) (3.9%) Other income 22 1 62 181.8% 6100.

  3. Slide 3: Q1-16 Balance Sheet and Ratios

    Q1-16 Balance Sheet and Ratios (NIS m) Change compared to: Balance Sheet and Ratios Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Total assets 207,796 205,260 207,200 (0.3%) 0.9% Credit to the public, net 121,718 127,216 129,203 6.1% 1.6% Securities 37,052 38,935 38,064 2.7% (2.2%) Deposits from the public 152,804

  4. Slide 4: Highlights of Q1-16

    Highlights of Q1-16 o CET-1 slightly decreased to 9.4% due to phase-in of Basel III transitional instructions Infrastructure o LCR at 133.9%, LR at 6.4% o Robust asset quality o Total expenses declined by 2.5% compared to Q4-15 Cost o Salary and related expenses declined by 1.6% compared to Q4-15 o

  5. Slide 5: 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, Q1-16 Basel III CET-1 ratio Jan 2017 requirement by BOI 10.27% 10.2% 9.2% BOI Threshold for Jan 2017 10.0% 10.00% 9.84% 9.92% 9.4% 9.5% 9.4% 8.9% 9.74% 9.65% 9.40% 9.2% 9.1% 2013 2014 2015

  6. Slide 6: Robust Liquidity and Leverage Position

    Robust Liquidity and Leverage Position Infrastructure Liquidity Coverage Ratio (LCR) Comparison of LCR, Q1-16 BOI Threshold for Jan ‘17 140.4% 133.9% 134% 131.5% 128.0% 125% 105% 105% 100% 97% Q2-15 Q3-15 Q4-15 Q1-16 MZTF POLI FIBI LUMI DSCT Leverage Ratio (LR) Comparison of LR, Q1-16 BOI Threshold

  7. Slide 7: Robust Credit Quality

    Robust Credit Quality Infrastructure (NIS m) Loan loss provision LLP ratio 0.49% 580 0.14% 0.15% 0.14% 164 187 46 2013 2014 2015 Q1-16 2013 2014 2015 Q1-16 Impaired 4,168 2,838 3,042 2,881 Substandard 1,015 928 524 450 Special Mention 2,560 3,037 1,684 2,063 Total Problematic Credit Risk 7,743 6,803

  8. Slide 8: Continued Cost Restraint

    Continued Cost Restraint Cost (NIS m) Total Expenses, Group 1,433 -1.1% 1,454 -2.5% 1,417 1,417 278 2.5% 285 292 -2.4% 285 284 -3.9% 273 289 -5.5% 273 871 -1.4% 859 873 -1.6% 859 Q1-15 Q1-16 Q4-15 Q1-16 * Maintenance & Salary & Related Depreciation Other * Q1-16 salary expenses increased by 1.2% com

  9. Slide 9: Credit Growth in Targeted Segments

    Credit Growth in Targeted Segments Growth (NIS bln) Credit Balances, Gross (New Segmentation) 29.9 30.8 131.3 27.8 22.5 22.6 23.2 21.8 21.8 129.3 20.4 3.2% 3.1% 2.6% 10.8% 10.4% 6.3% 123.7 1.6% Mortgages Consumer credit* Small businesses 6.1% 18.4 18.6 18.7 14.3 14.7 13.0 0.2% 2.8% 1.8% Total (gross

  10. Slide 10: Robust Performance of Subsidiaries

    Robust Performance of Subsidiaries Subsidiaries (NIS m) (USD m) 19.4% 8.8% 15.7% 7.6% 88 6.7% 18 11.8% 11.0% 16 8.8% 13 4.0% 45 46 32 33 21 Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Q1-16 Net income ROE 10

  11. Slide 11: IDB NY

    IDB NY Subsidiaries (USD m) Change compared to: P&L and Balance Sheet Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Net interest income 42 45 47 13.1% 4.7% Loan loss provision 2 1 5 209.8% 488.9% Non-interest income 12 16 14 22.5% (10.5%) Operating & other expenses 35 34 36 0.9% 5.0% Net income 13 18 16 19.8% (12.3

  12. Slide 12: Mercantile

    Mercantile Subsidiaries Change compared to: (NIS m) P&L and Balance Sheet Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Net interest income 217 228 230 6.0% 0.9% Loan loss provision (2) 57 (5) - - Non-interest income 121 82 76 (37.2%) (7.3%) Operating & other expenses 198 208 229 15.7% 10.1% Net income 88 21 45 (48

  13. Slide 13: CAL

    CAL Subsidiaries (NIS m) Change compared to: P&L and Balance Sheet Q1-15 Q4-15 Q1-16 Q1-15 Q4-15 Credit card transactions 227 233 234 3.1% 0.4% Net interest income 65 76 80 23.1% 5.3% Non-interest financing income 4 5 4 0.0% (20.0%) Total income 296 314 318 7.4% 1.3% Total expenses 244 267 247 1.2%

  14. Slide 14: Continuous Effort to Improve Organizational Culture

    Continuous Effort to Improve Organizational Culture YTD P&L Culture Organizational change In Discount’s management Supporting:  Innovation (building a digital arm)  Strengthen group control & synergies (appointment of head of subsidiaries, member of management)  Focus & cost efficiency (merging c

  15. Slide 15: 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

  16. Slide 16: Accelerate Cost Reduction Plan

    1 Accelerate Cost Reduction Plan In a process of preparation of an accelerated cost reduction plan,  Macro environment, simultaneously with preparation of the operational efficiency plan regulatory pressure required by BOI. The plans will include: and increased rivalry force us to accelerate our Ea

  17. Slide 17: Enhance Retail Growth - Improve Productivity

    2 Enhance Retail Growth - Improve Productivity Comparison of productivity ratio (total income-to-avg. positions), 2015 0.95 Peers’ average 1.16 0.90 1.04  Although it has 0.78 0.70 improved, productivity is still below best practice and most of peers FIBI DSCT LUMI MZTF POLI Expansion of back offic

  18. Slide 18: Enhance Retail Growth – Continue to Develop Best-In-Class Digital Channels

    2 Enhance Retail Growth – Continue to Develop Best-In-Class Digital Channels Forefront of digital innovation Best-in-class functionality iPhone & Android touch access  Best-in-class customer experience 18

  19. Slide 19: Build Platform for Future Banking

    3 Build Platform for Future Banking Retail transformation program Branch network & role of branches  On the background of Next generation digital channels the digital revolution and Customer journeys growing competition from Fintec, we have Big data launched a strategic New customer & new employee

  20. Slide 20: THANK YOU !

    ISRAEL THANK YOU !

  21. Slide 21: 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 21

  22. Slide 22: 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 Q1-16 reports, as well as in strategic updates referred to in the Bank’s reports. The information contained herein may be partial and may include information tha

Israel Discount Bank — Q1 2016 Earnings Presentation on 6ix