ISRAEL DISCOUNT BANK LTD August 15, 2016
Israel Discount Bank Announces 2nd Quarter of 2016 Q2-16 Net Income - NIS 393 m, ROE - 12.3% Adjusted Q2-16 Net Income - NIS 241 m, ROE - 7.4% Basel 3 Common Equity Tier 1 - 9.5% Tel-Aviv, Israel - Israel Discount Bank (TASE: DSCT), today announces its financial results for the second quarter of 2016.Main highlights of Q2-16:
Infrastructure
› CET-1 of 9.5%
› LCR at 133.9%, LR at 6.5%
› Robust asset quality
Cost
Growth
› Adjusted total expenses declined by 0.9% compared to Q1-16
› Adjusted salary and related expenses declined by 2.1% compared to Q1-16
› Among the fastest credit growth in the sector: Consumer credit - 3.9% QoQ, 7.5% YTD, 12.7% YoY Small businesses - 1.0% QoQ, 3.3% YTD, 9.3% YoY
Subsidiaries
› Robust performance and profitability of IDB NY, Mercantile & CAL
Organizational › Commenced negotiations with the labor union
Culture
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=e02e9321cf42394a2b56ed932852da709
- To join the conference call, please dial:
Israel: 1809216057
International: +44 (0) 1452 555566
USA: 18669669439
UK: 08006940257
Conference ID: 54287201
Main metrics from the P&L:
Net interest income for Q2-16 increased by 9.3% compared to Q1-16, to NIS 1,155 m, as a result of both a positive quantitative impact due to credit growth and a positive price impact due to the increase in CPI (+5.0% versus -0.9% in Q1-16).
NIM (excluding ALM derivatives) increased to a level of 2.22% compared to 2.17% in the previous quarter.- Loan loss provision amounted to NIS 58 m, constituting 0.18% of total credit.
- Total non-interest income increased by 39.1% to NIS 1,088 m, mainly due to an increase in non-interest financing income, resulting from income from the sale of rights in Visa Europe amounting to NIS 360 m. Total non-interest income excluding the income mentioned above, was NIS 728 m.
- Commissions increased by 1.4% to NIS 633 m.
- Salaries and related expenses stayed almost flat despite a NIS 20 m bonus payment to CAL employees with respect to the sale of rights in Visa Europe. Excluding the bonus, salaries and related expenses were 2.1% lower than in the previous quarter.
- Other expenses increased by 17.5% to NIS 335 m as a result of a NIS 40 m provision in CAL. Excluding the provision, other expenses were NIS 295 m - 3.5% higher than in Q1-16.
- Total operating & other expenses increased by 3.3% to NIS 1,464 m, mainly due to the increase in other expenses and the abovementioned bonus payment. Total operating & other expenses excluding these items, was NIS 1,404 m - a decrease of 0.9% compared to Q1-16.
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Net income increased by 119.6% to NIS 393 m compared to NIS 179 m in the previous quarter. Net income excluding the NIS 152 m net impact of the aforementioned items, is NIS 241 m - an increase of 34.6%.
Main metrics from the Balance Sheet and ratios:
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Credit to the public, net increased by 3.0% to NIS 133.1 billion (4.6% YTD and 10.7% YoY) due to robust growth in focused segments-
Consumer credit (net) grew 3.9% QoQ, 12.7% YoY.
Micro & small enterprises (net) grew by 1.0% QoQ, 9.3% YoY. Mortgages (net) grew by 4.6% QoQ, 13.0% YoY.
Total capital increased by 4.1% to NIS 14.2 billion compared to Q1-16, while RWA increased by 2.2% in this period, mainly due to credit growth. Total capital grew by 5.4% in the last year. Basel 3 Common Equity Tier 1 increased to the level of 9.5%.
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Cost/income ratio declined to a level of 65.3% (74.5% adjusted), compared to 77.1% in Q1-16. Cost/income ratio in the corresponding period was 76.0%.
ROE is 12.3% (7.4% adjusted), compared to 5.5% in Q1-16 and 8.7% in Q2-15.
- Leverage ratio of 6.0%.
- Liquidity coverage ratio of 133.9%.
Developments in certain income statement items in the second quarter of 2016, compared with the first quarter of 2016 and compared with the second quarter of 2015:
In NIS millions | 2016 | 2015 | % Change compared to | ||
Q2 | Q1 | Q2 | Q1 -16 | Q2 -15 | |
Interest income | 1,494 | 1,226 | 1,550 | 21.9 | (3.6) |
Interest expenses | 339 | 169 | 455 | 100.6 | (25.5) |
Interest income, net | 1,155 | 1,057 | 1,095 | 9.3 | 5.5 |
Credit loss expenses (reversal expenses) | 58 | 46 | (28) | 26.1 | - |
Net interest income after credit loss expenses | 1,097 | 1,011 | 1,123 | 8.5 | (2.3) |
Non-interest income | |||||
Non-interest financing income | 428 | 96 | 102 | 345.8 | 319.6 |
Commissions | 633 | 624 | 655 | 1.4 | (3.4) |
Other income | 27 | 62 | 14 | (56.5) | 92.9 |
Total non-interest income | 1,088 | 782 | 771 | 39.1 | 41.1 |
Operating and other expenses | |||||
Salaries and related expenses | 861 | 859 | 832 | 0.2 | 3.5 |
Maintenance and depreciation of buildings and equipment | 268 | 273 | 291 | (1.8) | (7.9) |
Other expenses | 335 | 285 | 295 | 17.5 | 13.6 |
Total operating and other expenses | 1,464 | 1,417 | 1,418 | 3.3 | 3.2 |
Income before taxes | 721 | 376 | 476 | 91.8 | 51.5 |
Provision for taxes on income | 272 | 183 | 190 | 48.6 | 43.2 |
Income after taxes | 449 | 193 | 286 | 132.6 | 57.0 |
Bank's share in income (loss) of affiliated companies, net of tax effect | (2) | (1) | 2 | 100.0 | - |
Net income attributed to the non-controlling rights holders in consolidated companies | (54) | (13) | (18) | 315.4 | 200.0 |
Net income attributed to Bank's shareholders | 393 | 179 | 270 | 119.6 | 45.6 |
Net return on equity attributed to the Bank's shareholders, in %⁽¹⁾ | 12.3 | 5.5 | 8.7 | ||
Net income attributed to Bank's shareholders - disregarding gains on the sale of rights in Visa Europe and a provision in CAL⁽²⁾ | 241 | 179 | 270 | 34.6 | (10.7) |
Net return on equity attributed to the Bank's shareholders, %⁽¹⁾ - disregarding gains on the sale of rights in Visa Europe and a provision in CAL⁽²⁾ | 7.4 | 5.5 | 8.7 | ||
Footnotes: | |
(1) | On an annual basis. |
(2) | See Note 17 C to the condensed financial statements. |
Balance sheet (1)
In NIS millions | June 30, 2016 | June 30, 2015 | December 31, 2015 | % Change compared to | |
June 30, 2015 | December 31, 2015 | ||||
Total assets | 208,882 | 203,662 | 205,260 | 2.6 | 1.8 |
Credit to the public, net | 133,092 | 120,279 | 127,216 | 10.7 | 4.6 |
Securities | 38,053 | 36,590 | 38,935 | 4.0 | (2.3) |
Deposits from the public | 161,987 | 151,758 | 157,404 | 6.7 | 2.9 |
Equity attributed to the Bank's shareholders | 13,769 | 13,039 | 13,288 | 5.6 | 3.6 |
Total equity | 14,181 | 13,460 | 13,634 | 5.4 | 4.0 |
Footnote: | |||||
(1) Excluding balances classified as assets and liabilities held for sale - see Note 18 to the condensed financial statements. | |||||
Developments in certain income statement items in the first half of 2016, compared with the first half of 2015:
In NIS millions | For the six months ended June 30, | ||
2016 | 2015 | % Change | |
Interest income | 2,720 | 2,632 | 3.3 |
Interest expenses | 508 | 517 | (1.7) |
Interest income, net | 2,212 | 2,115 | 4.6 |
Credit loss expenses | 104 | 4 | 2500.0 |
Net interest income after credit loss expenses | 2,108 | 2,111 | (0.1) |
Non-interest income | |||
Non-interest financing income | 524 | 287 | 82.6 |
Commissions | 1,257 | 1,312 | (4.2) |
Other income | 89 | 36 | 147.2 |
Total non-interest income | 1,870 | 1,635 | 14.4 |
Operating and other expenses | |||
Salaries and related expenses | 1,720 | 1,703 | 1.0 |
Maintenance and depreciation of buildings and equipment | 541 | 575 | (5.9) |
Other expenses | 620 | 573 | 8.2 |
Total operating and other expenses | 2,881 | 2,851 | 1.1 |
Income before taxes | 1,097 | 895 | 22.6 |
Provision for taxes on income | 455 | 344 | 32.3 |
Income after taxes | 642 | 551 | 16.5 |
Bank's share in income (loss) of affiliated companies, net of tax effect | (3) | 2 | - |
Net income attributed to the non-controlling rights holders in consolidated companies | (67) | (31) | 116.1 |
Net income attributed to Bank's shareholders | 572 | 522 | 9.6 |
Net return on equity attributed to the Bank's shareholders, in %⁽¹⁾ | 8.8 | 8.3 | |
Net income attributed to Bank's shareholders - disregarding gains on the sale of rights in Visa Europe and a provision in CAL⁽²⁾ | 420 | 522 | (19.5) |
Net return on equity attributed to the Bank's shareholders, %⁽¹⁾ - disregarding gains on the sale of rights in Visa Europe and a provision in CAL⁽²⁾ | 6.4 | 8.3 | |
Footnotes:
On an annual basis.
See Note 17 C to the condensed financial statements.
Review of developments in the balance of net credit to the public, by regulatory segments of operations:
In NIS millions | June 30, | December 31, | % Change |
2016 | 2015 | ||
Domestic operations: | |||
Households⁽¹⁾ | 47,575 | 44,196 | 7.6 |
Private banking⁽¹⁾ | 183 | 158 | 15.8 |
Small and micro businesses | 32,333 | 31,308 | 3.3 |
Medium businesses | 14,237 | 13,205 | 7.8 |
Large businesses | 19,467 | 18,614 | 4.6 |
Institutional bodies | 432 | 466 | (7.3) |
Total Domestic operations | 114,227 | 107,947 | 5.8 |
International operations: | |||
Private Individuals | 1,574 | 1,578 | (0.3) |
Business operations | 19,384 | 19,743 | (1.8) |
Total international operations | 20,958 | 21,321 | (1.7) |
Total credit to the public | 135,185 | 129,268 | 4.6 |
Allowance for credit loss expenses | (2,093) | (2,052) | 2.0 |
Total credit to the public, net | 133,092 | 127,216 | 4.6 |
(1) Of which - Mortgages | 23,508 | 21,808 | 7.8 |
Israel Discount Bank Limited published this content on 15 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 August 2016 10:19:09 UTC.
Original documenthttps://investors.discountbank.co.il/sites/investors.discountbank.co.il/files/IR_Media/Results_Center/2016/PR/PR_Q2-16_FINAL.pdf
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