August 19, 2015
Press Release
Israel Discount Bank Announces 2nd Quarter of 2015 Q2-15 Net Income - NIS 270 m, ROE - 8.7% Basel 3 Capital Adequacy Ratio - 9.5% Tel-Aviv, Israel - Israel Discount Bank (TASE: DSCT), today announces its financial results for the second quarter of 2015.Main highlights of Q2-15 results:
Capital
CT-1 Basel III ratio increased to 9.5%
Asset
Quality
Robust credit quality
Negative LLP ratio due to recoveries
Growth
2.2% growth in consumer credit and 1.9% growth in SME credit
Subsidiaries growth
Costs Total expenses dropped by 1.0% mainly due to a decline of 4.5% in salary and related expenses.
Focus
London branch closure at final stages
Swiss operation - Non-binding offers were received ; a data room was opened
DBLA closure at final stages
Conference Call and WEBEX Details
To join the online presentation, please click on the following URL:
https://idbank.webex.com/idbank/onstage/g.php?MTID=e24918cc44caa5319115a01bb540aea1e
To join the conference call, please dial:
Israel: 1809216057
International: +44 (0) 1452 555566
USA: 18669669439
UK: 08006940257
Conference ID: 1352180
Main metrics from the P&L (compared to Q1-15):
Net interest income for Q2-15 increased by 7.4% compared to Q1-15, to NIS 1,095 m, mainly as a result of the higher CPI (1.1% compared to -1.6% in Q1-15), which was partially offset by the low BOI interest rate. Accordingly, NIM (excluding ALM derivatives) was 2.13% compared to 2.19% in Q1-15.
Loan loss provision amounted to a negative amount of NIS 28 m, constituting 0.09% of total credit.
Total non-interest income decreased by 10.8% to NIS 771 m, mainly due to a decline of 44.9% in non-interest financing income, resulting from lower capital gains. Commissions stayed almost flat, amounting to NIS 655 m. Total operating & other expenses declined by 1.0% to NIS 1,418 m, mainly due to a decline of 4.5%
in salary and related expenses.
Net income increased by 7.1% to NIS 270 m compared to NIS 252 m in the previous quarter.
Main metrics from the Balance Sheet and ratios:
Credit to the public, net decreased by 1.2% to NIS 120.3 billion mainly due to the strengthening of the Shekel. Excluding the US dollar impact, total credit stayed flat. In terms of segments, consumer credit grew by 2.2%, SME grew by 1.9%. Conversely, corporate and commercial credit dropped by
4.6% and 3.3%, respectively.
Total capital grew by 1.2% to NIS 13.5 billion, while RWA decreased by 1.7% to NIS 140.1 billion, mainly due to the impact of the US dollar. The Basel 3 capital adequacy ratio increased to the level of 9.5%. Cost / Income ratio declined to a level of 76%, compared to 77.1%.
ROE was 8.7%, compared to 8.1%.
Leverage Ratio of 6.6%.
Liquidity Coverage Ratio of 140.4%.
Following are the developments in certain income statement items in the second quarter of 2015, compared with the first quarter of 2015 and compared with the second quarter of 2014:
In NIS millions 2015 2014
% Change compared to
Q2 Q1 Q2 Q1 2015 Q2 2014
Interest income 1,550 1,082 1,581 43.3 (2.0) Interest expenses 455 62 481 633.9 (5.4) Interest income, net 1,095 1,020 1,100 7.4 (0.5) Credit loss expenses (expenses reversal) (28) 32 (35) - (20.0) Net interest income after credit loss expenses 1,123 988 1,135 13.7 (1.1) Non-interest Income
Non-interest financing income 102 185 114 (44.9) (10.5) Commissions 655 ⁽⁵⁾657 637 (0.3) 2.8
Other income 14 22 ⁽²⁾7 (36.4) 100.0
Operating and other Expenses
Salaries and related expenses 832 871 ⁽²⁾⁽³⁾1,115 (4.5) (25.4) Maintenance and depreciation of buildings and equipment 291 ⁽³⁾284 ⁽³⁾286 2.5 1.7
Other expenses 295 ⁽³⁾⁽⁵⁾278 ⁽³⁾260 6.1 13.5
Provision for taxes on income 190 ⁽³⁾154 ⁽²⁾⁽³⁾65 23.4 192.3
Income after taxes 286 265 167 7.9 71.3
Bank's share in income of affiliated companies, net of tax effect 2 - 5 - (60.0) Net income attributed to the non-controlling rights holders in consolidated
companies (18) (13) (11) 38.5 63.6
Net return on equity attributed to the Bank's shareholders, in %⁽¹⁾ 8.7 8.1 5.5
Net income attributed to Bank's shareholders - disregarding the impact of the retirement plan in 2014 270 252 ⁽⁴⁾352 7.1 (23.3)
Net return on equity attributed to the Bank's shareholders, %⁽¹⁾ - disregarding
the impact of the retirement plan in 2014 8.7 8.1 ⁽⁴⁾12.2
(1) | On an annual basis. |
(2) | Restated, in respect of the retroactive implementation of the guidelines of the Supervisor of Banks in the matter of employee rights, See Note 1 E (1) to the condensed financial statements. |
(3) | Restated, in respect of the retroactive implementation of the guidelines of the Supervisor of Banks in the matter of capitalization of software development costs, see Note 1 E (2) to the condensed financial statements. |
(4) | For details regarding the net changes in the provision for severance pay, see Note 16L & M to the 2014 financial statements (p. 451). |
(5) | Reclassified - improving the classification of the refunds provision. |
Balance sheet
In NIS millions
June 30,
2015
June 30,
2014
December 31,
2014
% Change compared to
June 30, 2014 December 31, 2014
Total assets 203,662 ⁽¹⁾196,251 ⁽¹⁾207,185 3.8 (1.7) Credit to the public, net 120,279 115,161 120,123 4.4 0.1
Securities 36,590 39,191 37,353 (6.6) (2.0) Deposits from the public 151,758 145,350 152,903 4.4 (0.7) Equity attributed to the Bank's shareholders 13,039 ⁽¹⁾12,109 ⁽¹⁾12,599 7.7 3.5
Total equity 13,460 ⁽¹⁾12,415 ⁽¹⁾12,989 8.4 3.6
(1) Restated, in respect of the retroactive implementation of the guidelines of the Supervisor of Banks in the matter of employee rights and in the matter of capitalization of software development costs, see Note 1E(1) and (2) to the condensed financial statements, respectively.
The following is a review of developments in the balance of net credit to the public, by segments of operations:
In NIS millions
June 30,
2015
March 31,
2015
December 31,
2014
September 30,
2014
June 30,
2014
Retail - household segment 42,140 41,254 40,889 40,577 ⁽¹⁾39,445
Of which - Mortgages 20,632 20,202 20,138 20,035 19,835
Retail - small business segment 14,819 14,539 14,255 13,857 ⁽¹⁾13,555
Corporate banking segment 37,784 39,581 39,105 39,409 ⁽¹⁾38,440
Middle market banking segment 21,742 22,477 21,953 21,415 ⁽¹⁾20,136
Private banking segment 3,794 3,867 3,921 3,716 3,585
(1) Reclassified, see Note 13 C (2) to the condensed financial statements.
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