Israel Discount Bank Limited Class A · TASE:DSCT
Israel Discount Bank Limited Class A — Q3 2022 Earnings Presentation
23 slides from Israel Discount Bank Limited Class A's earnings presentation, Nov 23, 2022
Slide 1: 3Q 22 Review
3Q 22 REVIEW Investor Relations November 23, 2022
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 2022 report, as well as in strategic updates referred to in the Bank’s reports. This presentation is not a substitute for the Bank’s 3rd quarter fin
Slide 3: Opening Remarks and Financial Review
Opening Remarks and Financial Review Barak Nardi, CFO 3
Slide 4: Continuous Strong Underlying Performance Across the Key Indicators in 3Q22
CONTINUOUS STRONG UNDERLYING PERFORMANCE ACROSS THE KEY INDICATORS IN 3Q22 NET INCOME ROE 893M 15.0% NET INTEREST INCOME GROWTH EFFICIENCY RATIO CREDIT LOSS EXPENSES (YOY) 37.6% 55.2% 0.18% 4
Slide 5: 3Q and 9M 2022 Highlights
3Q AND 9M 2022 HIGHLIGHTS Record profitability with 3Q22 net income of 893m and ROE of 15.0% supported by increase in revenues from core banking activity. Strong positive impact of interest rate increase: Net interest income increased in 3Q to 2,280 million, 37.6% YoY increase and 10% increase from
Slide 6: Signs of Economic Slowdown, Yet Macro Fundamentals Are Still Solid
SIGNS OF ECONOMIC SLOWDOWN, YET MACRO FUNDAMENTALS ARE STILL SOLID Israel’s GDP Growth (%) to slowdown* in 2023 Bank of Israel’s Rate reached 3.25% in November 2022 8.2 3.25 6.0 2.75 4.1 4.2 3.0 2.00 1.25 0.25 0.75 0.10 0.10 0.35 -2.2 28 2//802/201 9- 1 0/0 4 0/2 /4 0 219 /0 07 0//701/202 1- 2 4/0 2
Slide 7: Responsible Credit Growth Focused on Targeted Segments
RESPONSIBLE CREDIT GROWTH FOCUSED ON TARGETED SEGMENTS Evolution of Credit Growth Well Balanced Loan Book With Mortgages Medium Enterprises in NIS bn; growth % in NIS bn; growth % in NIS bn; growth % Growing Share of Mortgages 26.0% 18.1% 4.4% (-1.8%) 16.0% 63.4 17.3 17.0 1.9% 60.8 14.4 240.0 Dec ‘2
Slide 8: Growth in Net Interest Income and in Fees Highlight the Strength of Our Core Business
GROWTH IN NET INTEREST INCOME AND IN FEES HIGHLIGHT THE STRENGTH OF OUR CORE BUSINESS Total Income vs. vs. Financing Income From Current Operations (NIS m) 3Q21 2Q22 NIS m Period end BOI rate 0.1% 0.75% 2.00% 3,307 Average BOI rate* 0.1% 0.47% 1.50% 23.8% 14.2% 5 151 2,897 42.0% 2,672 2.4% 871 7.9%
Slide 9: Cost Income Ratio Is Improving Due to Revenues Growing Faster Than Expenses
COST INCOME RATIO IS IMPROVING DUE TO REVENUES GROWING FASTER THAN EXPENSES Total Expenses vs. vs. Cost Income Ratio Is Improving Due To Positive Jaws 3Q21 2Q22 NIS m 1,827 1,827 10.3% 6.5% 9M.22 Jaws 1,716 1,716 1,656 1,656 637 12.8% 497 565 28.2% 12.7% 66.7% 64.9% 64.0% 309 63.3% 19.6% 292 307 5.8
Slide 10: High Quality Loans and Conservative Underwriting Produce Solid Credit Metrics
HIGH QUALITY LOANS AND CONSERVATIVE UNDERWRITING PRODUCE SOLID CREDIT METRICS Increase in Group Basis Provision Drove the Overall Increase in Credit Loss Expenses (in NIS m and %) 0.23% 0.18% % Credit loss expense (0.02%) (0.11%) (0.30%) 1Q21 2Q21 (0.25%) 3Q21 4Q21 1Q22 2Q22 3Q22 (expense release) (
Slide 11: Asset Quality Remains Strong with Appropriate Coverage
ASSET QUALITY REMAINS STRONG WITH APPROPRIATE COVERAGE Allowance for Loan Loss Provisions from Total Credit* NPL/Total Credit** remain relatively low 0.84% 0.74% 0.67% 1.31% 1.29% 1.31% 1Q22 2Q22 3Q22 NPLs Are Well Covered by Loan Loss Provision*** 197.18% 176.27% 153.02% 1Q22 2Q22 3Q22 1Q22 2Q22 3Q
Slide 12: Solid Funding Base and Ample Liquidity
SOLID FUNDING BASE AND AMPLE LIQUIDITY Diversified Domestic Public Deposit Base With High Share of Continuous Growth In Deposit Base Households Deposits 30.9.22 19.5% 290.6 3.3% 283.4 245.4 Households* Overseas Institutional 13% 45% Total domestic deposits Domestic 213.5 247.0 255.1 Corporates 17% 2
Slide 13: Mercantile: Increase in Net Interest Income Leading to Strong Net Income and ROE
MERCANTILE: INCREASE IN NET INTEREST INCOME LEADING TO STRONG NET INCOME AND ROE Net Income and ROE Total Credit Mortgages 3Q22 Strong ROE of 19.3% and net (NIS m ) (NIS bn ) (NIS bn ) 30.4% income of NIS 185 million were 17.4% 5.0% driven by increase in net interest 54.2% 10.9 2.4% 10.4 income, due
Slide 14: IDBBank: Increase in Revenues Offset by Shift to Positive Credit Loss Expenses
IDBBANK: INCREASE IN REVENUES OFFSET BY SHIFT TO POSITIVE CREDIT LOSS EXPENSES Net Income and ROE Credit Loss Expenses Total Credit IDBNY solid net income of $25 (USD m) (%, USD m) (USD m) million in 3Q22 is driven by 42.3% YoY increase in net interest income,, 7.8% after further increase in Fed Fun
Slide 15: CAL: Growing Consumer Credit and Transaction Turnover Support Strong Results
CAL: GROWING CONSUMER CREDIT AND TRANSACTION TURNOVER SUPPORT STRONG RESULTS Net Income and ROE Consumer Credit Transaction Turnover in NIS m in NIS m in NIS bn In 3Q22 CAL reported strong net 24.1% income of NIS 109 million and 20.9% 16.2% ROE. 20.9% 4.7% 39.4 18.7% 6.7 33.9 6.4 109 14.6% The resul
Slide 16: To Summarize
TO SUMMARIZE We delivered record 3Q22 results, with ROE of 15% and Cost Income of 55.2%, as we remained focused on continuous execution of our strategic initiatives. We benefited from increase in interest rate, which became evident during the quarter and led to increase of 37.6% in net interest inco
Slide 17: Q&A
Q&A Barak Nardi, CFO Yossi Beressi, Chief Accountant 17
Slide 18: Appendices
APPENDICES space olgeoonT
Slide 19: Israel Discount Bank: P&L and Selected Ratios
ISRAEL DISCOUNT BANK: P&L AND SELECTED RATIOS NIS m 3Q22 2Q22 3Q21 Vs. 2Q22 Vs. 3Q21 9M22 9M21 Change Net interest income 2,280 2,073 1,657 10.0% 37.6% 6,153 4,846 27.0% Credit loss expenses (expenses release) 106 131 (126) (19.1%) -- 177 (683) -- Non-interest financing income 151 (27) 198 -- (23.7%
Slide 20: Israel Discount Bank: Selected Balance Sheet Items
ISRAEL DISCOUNT BANK: SELECTED BALANCE SHEET ITEMS NIS m 30.09.22 31.12.21 30.09.21 Cash and deposits with banks 71,510 59,638 46,334 Securities* 43,904 45,076 47,104 Credit to the public 240,032 216,196 206,944 Provision for credit losses -3,151 -3,040 -3,117 Credit to the public, net 236,881 213,1
Slide 21: Mercantile: Financial Performance
MERCANTILE: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios NIS m 3Q22 2Q22 3Q21 Vs. 2Q22 Vs. 3Q21 9M22 9M21 change Net interest income 452 414 341 9.2% 32.6% 1,225 982 24.7% Credit loss expenses (expenses release) 16 36 7 (55.6%) 128.6% 77 (75) -- Non-interest income 10
Slide 22: IDBBank: Financial Performance
IDBBANK: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios USD m 3Q22 2Q22 3Q21 Vs. 2Q22 Vs. 3Q21 9M22 9M21 change Net Interest Income 92 79 64 16.5% 43.8% 243 186 30.6% Credit Loss Expenses (Expenses Release) 5 -2 -9 -- -- -4 -- -- Non-Interest Income 17 20 21 (15.0%) (19
Slide 23: CAL: Financial Performance
CAL: FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios NIS m 3Q22 2Q22 3Q21 Vs. 2Q22 Vs. 3Q21 9M22 9M21 change Income From Credit Card Transactions 434 412 381 5.3% 13.9% 1,223 1,044 17.1% Net Interest Income 170 172 140 (1.2%) 21.4% 502 402 24.9% Credit Loss Expenses (Exp