Discount Bank Q3 profit declines 40%

Uri Levin / Photo: Eyal Izhar, Globes

Like Israel's other banks, Discount Bank recorded a steep rise in its credit loss expense, although less than in the previous quarter.

Israel Discount Bank (TASE: DSCT) reported this morning that it posted a net profit for the third quarter of 2020 of NIS 258 million, representing a 40% decline in comparison with the third quarter of 2019. The bank attributes the decline to the coronavirus pandemic and its economic consequences, and also to one-time elements: profits from the sale of shares in Visa; the cost of an early retirement scheme at CAL- Israel Credit Cards; and a rise in litigation exposure. Excluding the one-time items, net profit in the third quarter of 2020 was NIS 357 million.

The third quarter's net profit represents a return on equity of 5.5%, which compares with 9.7% in the corresponding quarter of 2019.

Like Israel's other banks, Discount Bank recorded a sharp rise in provisions for credit losses, which totaled NIS 330 million, 117% more than in the corresponding quarter, although in comparison with the previous quarter this item fell by 38%.

Net interest income was NIS 1.5 billion in the third quarter, 0.9% more than in the previous quarter and 5.6% more than in the corresponding quarter of 2019. Non-interest income totaled NIS 1 billion, 3.7% more than in the corresponding quarter.

For the first nine months of 2020, Discount Bank, headed by Uri Levin, posted a profit of NIS 711 million, 48.4% less than in the corresponding period of 2019. Excluding one-time items, net profit in the first nine months of 2020 was NIS 866 million.

Discount Bank says that a voluntary retirement scheme has been approved in the group for the next two years, and that 540 employees (at Discount Bank itself, Mercantile Credit Bank, and CAL) have signed up for the scheme. Most of them will leave by the end of this year.

Published by Globes, Israel business news - en.globes.co.il - on November 24, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Uri Levin / Photo: Eyal Izhar, Globes
Uri Levin / Photo: Eyal Izhar, Globes
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