Israel Discount Bank (TASE: DSCT) today reported strong results for the second quarter of 2018. The bank, managed by CEO Lilach Asher-Topilsky, made a NIS 423 million profit, 55.5% more than in the second quarter of 2017. Discount Bank also reached an 11% return on equity, a rare achievement for it.
Together with its report, Discount Bank announced the beginning of a new streamlining plan in which 200 employees will take early retirement by the end of 2018. The cost of the plan, includes enlarged severance pay of up to 260%, is estimated at NIS 230 million - an average of NIS 1.15 million per employee.
The current plan follows a previous one that helped the bank improve its formerly poor efficiency ratio. As of the end of June, Discount Bank's efficiency ratio was 6.8%.
Discount Bank's good second quarter results helped it substantially reduce its provisions for credit losses, the bank's weak point in recent years. Provisions for credit losses totaled NIS 129 million in the second quarter, down 39%, compared with the corresponding quarter last year.
Discount Bank's revenue from its core business increased. Financing revenue rose 9%, thanks to the Consumer Price Index and growth in the bank's credit portfolio. Discount Bank's credit portfolio totaled NIS 156.5 billion as of the end of the second quarter, 5.2% more than at the beginning of the year. Particular prominent was the mortgage sector, which grew 12%, compared with the corresponding quarter in 2017. Revenue in the second quarter from bank charges shot up by over 7% to NIS 709 million.
Together with the announcement of its results, Discount Bank reported that it was planning to submit a non-binding bid in the coming days for the structure of a deal to acquired shares in Dexia Israel, one month after sending a general letter offering to acquire Dexia Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2018
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