The Bank of Israel recently concluded an audit of credit at Discount Bank.
Hebrew daily “Yediot Ahronot” reports that the Bank of Israel recently concluded an audit of credit at Israel Discount Bank (TASE:DSCT). Banking sources said the draft report states that Discount Bank must classify hundreds of millions of shekels of debts as problem debt. This means that the bank will have to make an additional allowance for doubtful debt.
Bank Discount and the Bank of Israel declined to comment on the report.
Discount Bank has made large allowances for doubtful debts in recent years. The extent of the bank's problem debts has been declining in recent months, in contrast to the situation at other banks. Discount Bank had NIS 9.1 billion in problem debt at the end of the third quarter of 2004.
Discount Bank expects to post a net profit of NIS 550 million for 2004. If it has to make an allowance for doubtful debts on the basis of the Bank of Israel report, this will reduce its net profit by tens of millions of shekels.
Published by Globes [online], Israel business news - www.globes.co.il - on January 6, 2005