Israel Discount Bank Limited Class A · TASE:DSCT
Israel Discount Bank Limited Class A — Q1 2022 Earnings Presentation
24 slides from Israel Discount Bank Limited Class A's earnings presentation, May 23, 2022
Slide 1: 1Q 22 Review: Financial and Strategic Highlights
1Q 22 REVIEW FINANCIAL AND STRATEGIC HIGHLIGHTS Investor Relations May 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 1st 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 1st quarter fin
Slide 3: Opening Remarks and Financial Review
Opening Remarks and Financial Review Barak Nardi, CFO 3
Slide 4: Strong Underlying Sustainable Performance Across Key Indicators
STRONG UNDERLYING SUSTAINABLE PERFORMANCE ACROSS KEY INDICATORS 1Q 2022 1Q 2022 NET INCOME ROE 983M Adjusted NIS 668m 18.3% Adjusted 12.4% YoY CET-1 YoY MORTGAGE CREDIT GROWTH RATIO ORIGINATION GROWTH 12.1% 10.55% 77.0% 4
Slide 5: Expectation for Rate Increase Continue; Longer-Term Positive for Profitability
EXPECTATION FOR RATE INCREASE CONTINUE; LONGER-TERM POSITIVE FOR PROFITABILITY Israel Gov’t Bonds Curve US Gov’t Bond Curve 2.87% 2.16% 2.60% 2.92% 2.21% 2.32% 1.69% 2.29% 1.95% 1.26% 1.50% 1.51% 0.92% 0.42% 1.02% 0.43% 0.38% 0.02% 1Y 2Y 3Y 5Y 6Y 7Y 10Y 1Y 2Y 3Y 5Y 7Y 10Y Current Annoucement of fina
Slide 6: 1Q 2022 Highlights
1Q 2022 HIGHLIGHTS Discount reported strong results with 983m in net profit and ROE of 18.3% supported by a strong underlying business and one-times associated from the sale of properties as we prepare to move to our new campus in early 2023. Adjusting for the sale of real estate properties net prof
Slide 7: Robust, Sustainable and Responsible Growth Across All Sectors
ROBUST, SUSTAINABLE AND RESPONSIBLE GROWTH ACROSS ALL SECTORS ESPECIALLY TARGETED SEGMENTS Credit to the public segments and composition Mortgages* Medium enterprises ** in NIS bn; growth % in NIS bn; growth % in NIS bn; growth % 220.7 216.2 196.9 53.4 56.1 16.7 Diversified credit book 43.9 14.8 Dec
Slide 8: Higher Fee and Net Interest Income Highlight Strength of Core Business
HIGHER FEE AND NET INTEREST INCOME HIGHLIGHT STRENGTH OF CORE BUSINESS Total Income vs. vs. Total Expenses 1Q21 4Q21 NIS m NIS m 21.6% 13.4% vs. vs. 3,086 1Q21 4Q21 1,939 2,722 416 Growing Credit Balances Helped (84.9%) (75.0%) 222 3.3% (12.0%) 2,537 50 45 Deliver Increase in NII 1,707 11 180 1,652
Slide 9: High Quality Loans and Conservative Underwriting Produce Solid Credit Metrics
HIGH QUALITY LOANS AND CONSERVATIVE UNDERWRITING PRODUCE SOLID CREDIT METRICS Credit loss expenses (in NIS m and %) Allowance for LLP/ FY ‘20: FY ‘21: FY ‘22: Total Credit (gross) 0.91% (0.34%) (0.11%) 1.42% 1.14% 1.83% 0.70% 0.42% 656 (0.02%) (0.11%) (0.30%) (0.25%) 1.38% 1.41% 532 1.31% (0.82%) 33
Slide 10: Subsidiaries
SUBSIDIARIES 10
Slide 11: Robust Credit Growth Delivers Strong Net Income and ROE
ROBUST CREDIT GROWTH DELIVERS STRONG NET INCOME AND ROE Mortgage Net income and ROE Total credit in NIS Bn Strong ROE of 12.9% and solid net in NIS m in NIS Bn 9.7 income of NIS 121 million at 9.0 Mercantile were driven by credit 40.1 38.2 7.3 growth, supportive CPI and carefully 18.5% 7.5% managed
Slide 12: Demand for Credit and Negative LLP Led to Solid Results
DEMAND FOR CREDIT AND NEGATIVE LLP LED TO SOLID RESULTS Net income and ROE Asset Quality Total credit IDBNY solid net income of $28 (USD m) (USD m) (USD Bn) million is driven by strong credit growth, up 16.5% annually, across 8.4 8.6 all regions, improved margins and a 0.96% 7.4 10.4% 9.7% release o
Slide 13: A Strong Quarter Across All Indicators with New Strategic Initiatives
A STRONG QUARTER ACROSS ALL INDICATORS WITH NEW STRATEGIC INITIATIVES Net income and ROE Consumer Credit Transaction turnover in NIS m in NIS m in NIS Bn CAL produced robust net income of NIS 80 million and 14.3% ROE 34.6 supported by a 22.9% increase in 14.3% 28.7 consumer credit and a 20.5% 12.9%
Slide 14: Strategy
STRATEGY 14
Slide 15: Our Focused 5-Year Strategic Plan Enables Achievement of Ambitious 2025 Financial Targets
OUR FOCUSED 5-YEAR STRATEGIC PLAN ENABLES ACHIEVEMENT OF AMBITIOUS 2025 FINANCIAL TARGETS ULTIMATE GOAL: TO BE THE BEST FINANCIAL INSTITUTION FOR ITS CUSTOMERS, DELIVERING SUPERIOR VALUE FOR SHAREHOLDERS, OVER TIME Winning in Traditional Banking Generating value through Maximizing Group Value Disrup
Slide 16: Q&A
Q&A Barak Nardi, CFO Yossi Beressi, Chief Accountant 16
Slide 17: Appendices
APPENDICES 17
Slide 18: Profit & Loss and Selected Ratios
PROFIT & LOSS AND SELECTED RATIOS NIS m 1Q22 4Q21 1Q21 Vs. 4Q21 Vs. 1Q21 Net interest income 1,800 1,683 1,504 7.0% 19.7% Credit loss expenses (expenses release) (60) (10) (147) (500.0%) 59.2% Non-interest financing income 45 180 298 (75.0%) (84.9%) Commissions 825 809 724 2.0% 14.0% Other income 41
Slide 19: Adjusted Profit & Loss & Selected Ratios
ADJUSTED PROFIT & LOSS & SELECTED RATIOS NIS m 1Q22 4Q21 1Q21 Vs. 4Q21 Vs. 1Q21 Net interest income 1,800 1,683 1,504 7.0% 19.7% Credit loss expenses (expense release) (60) (10) (147) 500.0% (59.2%) Non-interest financing income 45 180 298 (75.0%) (84.9%) Commissions 825 809 724 2.0% 14.0% Other inc
Slide 20: Adjustments to Profit & Loss
ADJUSTMENTS TO PROFIT & LOSS Gross Net NIS m 1Q22 4Q21 1Q21 1Q22 4Q21 1Q21 Retirement benefits 14 115 9 76 Early redemption of long term benefits 29 19 Provisions for new salary agreement 235 155 Income from real estate sales (408) (48) (315) (38) Total (408) 230 115 (315) 145 76 20
Slide 21: Selected Balance Sheet Items
SELECTED BALANCE SHEET ITEMS NIS m 31.03.22 31.12.21 31.03.21 Cash and deposits with banks 60,997 59,638 50,307 Securities* 44,074 45,076 45,347 Credit to the public 220,733 216,196 196,901 Provision for credit loss (2,882) (3,040) (3,609) Credit to the public, net 217,851 213,156 193,292 Credit to
Slide 22: Financial Performance
FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios NIS m 1Q22 4Q21 1Q21 Vs. 4Q21 Vs. 1Q21 Net interest income 359 342 306 5.0% 17.3% Credit loss expenses (expenses release) 25 (6) (9) n/a n/a Non-interest income 89 94 155 (5.3%) (42.6%) Total income 448 436 461 2.8% (2.8%)
Slide 23: Financial Performance
FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios Vs. Vs. USD m 1Q22 4Q21 1Q21 4Q21 1Q20 Net interest income 72 71 59 1.0% 21.2% Credit loss expenses (expenses release) (7) (5) 17 n/a n/a Non-interest income 18 21 23 (17.7%) (22.7%) Total income 89 92 82 (3.9%) 9.0% Operat
Slide 24: Financial Performance
FINANCIAL PERFORMANCE Main P&L and Balance Sheet metrics and selected ratios NIS m 1Q22 4Q21 1Q21 Vs. 4Q21 Vs. 1Q21 Income from credit card transactions 377 388 317 (2.8%) 18.9% Net interest income 160 146 129 9.6% 24.0% Credit loss expenses (expenses release) (1) 9 (4) n/a 75% Non-interest financin