Discount Bank of Israel (TASE: DSCT) released its third quarter financials this morning, showing a net profit of NIS 817 million, down form NIS 893 million in the third quarter of last year. The decline was mainly due to high credit loss provisions because of the higher interest rates in Israel and the war in the Gaza Strip, the combination of which raises the risk that borrowers will not be able to repay their loans.
Discount Bank made a provision for credit losses of NIS 596 million in the third quarter of this year, which compares with a provision of NIS 106 million in the corresponding quarter of last year. The bank said that the increase in the provision was almost entirely as result of the consequences of the war for the general provision, which amounted to NIS 534 million.
The bank’s annualized return on equity was 12.0% in the third quarter of this year, which compares with 15.0% in the corresponding quarter. Discount Bank also reported 2.2% growth in credit to the public, and said that it had "maintained responsible credit growth, against a background of the economic slowdown."
Discount Bank announced that it would distribute a dividend of NIS 123 million, amounting to 15% of it third quarter profit. This compares with a distribution of 30% of its profit in the second quarter. It will be recalled that the Bank of Israel indicated to the banks that, in the light of the economic and security situation and the rise in risk, they should curtail their dividends.
Published by Globes, Israel business news - en.globes.co.il - on November 27, 2023.
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