Israel Discount Bank (TASE: DSCT) reported net profit of NIS 680 million for the second quarter of 2022, 21% down from the corresponding quarter of 2021. The bank will distribute a dividend of NIS 133 million, 20% of the profits in the quarter.
The decline in profits stemmed from an increase in credit loss expenses - the security cushion set aside by banks to protect them from unpaid loans.
In the first half of 2022, Discount Bank's profit was NIS 1.66 billion, up 9.3% from the first half of 2021. Return on equity in the second quarter of 2022 was 11.8% compared with 17.2% in the second quarter of 2021. In the first half of 2022, return on equity was 14.9%, compared with 15.5% in the first half of 2021.
Discount Bank significantly increased its credit portfolio in the second quarter of 2022 to NIS 232.5 billion, up NIS 14.8 billion or 6.7% from the end of the first quarter in 2022, and up 9.1% since the start of the year. Credit growth has been facilitated by the NIS 1.4 billion raised in a new share issue.
Like all Israel's banks, Discount Bank has benefitted from the higher interest rates in recent months. The rise in the amount of loans extended and the rise in interest rates resulted in a 23% rise in income from rates to more than NIS 2 billion in the second quarter of 2022 from NIS 1.75 billion in the corresponding quarter of 2021. In the first half of the year income from interest rates was NIS 3.9 billion, up 21.4% from the first half of 2021.
Deposits from the public totaled NIS 283.4 billion at the end of the second quarter of 2022, up 8.6% from the end of 2021 and total assets amounted to NIS 364.4 billion, up 8.8% from the end of 2021.
Discount Bank CEO Uri Levin said, "The strong 2Q results demonstrate Discount's strength and ability to constantly achieve double digit return on equity, while responsibly growing in lending in our targeted segments. This, in changing market conditions, which pose challenges but also provide us with opportunities. We will continue leveraging these opportunities towards achieving our strategic targets, promoting winning customer experience and creating significant value to our shareholders."
Published by Globes, Israel business news - en.globes.co.il - on August 11 2022.
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