ISRAEL DISCOUNT BANK LTD November 17, 2016
Israel Discount Bank Announces 3rd Quarter of 2016 Q3-16 Net Income - NIS 188 m, ROE - 5.5% Adjusted Q3-16 Net Income - NIS 216 m, ROE - 6.4% Basel 3 Common Equity Tier 1 - 9.8% Tel-Aviv, Israel - Israel Discount Bank (TASE: DSCT), today announces its financial results for the third quarter of 2016.Main highlights of Q3-16:
Infrastructure
Cost
Growth
› CET-1 of 9.8%, positively impacted by capital raising, which contributed 0.4%.
› Public offering of shares and warrants at the amount of NIS 580 m (gross), NIS 763 m assuming full exercise of warrants.
› LCR at 129.7%, LR at 6.7%.
› Expansion of efficiency plan: net reduction of 2,000 employees by 2021- of which, 1,000 employees had already retired by December 2015. The remaining 1,000 employees will retire by 2021, including 500 employees through an early retirement plan (263 employees have already signed the retirement agreement and are expected to retire by the end of 2016).
› Adjusted total expenses increased by 0.7% compared to Q2-16
› Adjusted salary and related expenses declined by 3.2% compared to Q2-16
› Capital raising enabled us to continue to demonstrate credit growth among the
fastest in the sector:
Consumer credit - 6.3% QoQ, 12.5% YTD, 16.2% YoY Small businesses - 4.3% QoQ, 11.8% YTD, 16.7% YoY
Subsidiaries
› Robust performance and profitability of IDB NY, Mercantile & CAL
Organizational › Advanced stage of 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=ec337d76018c1dbf60ce90a1de863fd88
-
To join the conference call, please dial:
Israel: 1809216057
International: +44 (0) 1452 555566
USA: 18669669439
UK: 08006940257
Conference ID: 11800948
Main metrics from the P&L:
Net interest income for Q3-16 increased by 2.8% compared to Q2-16, to NIS 1,187 m, mainly as a result of a positive quantitative impact due to substantial credit growth. NIM (excluding ALM derivatives) increased to a level of 2.34% compared to 2.28% in the previous quarter.
- Loan loss provision amounted to NIS 141 m, of which NIS 45 m attributed to IDB NY. The rate of loan loss provision out of total credit is 0.42% for the quarter and 0.24% from the beginning of 2016.
- Total non-interest income decreased by 32.8% to NIS 731 m, due to an increase in non- interest financing income, resulting from NIS 360 m income from the sale of rights in Visa Europe, in the previous quarter. Total non-interest income, excluding the income from the sale of rights in Visa Europe, increased by 0.4%.
- Commissions increased by 6.6% to NIS 675 m.
- Salaries and related expenses declined by 3.6%, despite a NIS 16 m expense with respect to the early retirement plan (announced in September 2016). Salary and related expenses excluding the abovementioned expense and the NIS 20 m bonus to CAL employees in Q2-16, declined by 3.2%.
- Total operating and other expenses increased by 0.8% to NIS 1,475 m.
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Net income declined by 52.2% to NIS 188 m compared to NIS 393 m in the previous quarter. Net income, excluding the provision in CAL in Q3-16 and Q2-16 and the income from the sale of VISA Europe rights, declined by 10.4% to NIS 216 m compared to NIS 241 m.
Main metrics from the Balance Sheet and ratios:
-
Credit to the public, net increased by 4.7% to NIS 139.3 billion (9.5% YTD and 12.7% YoY) due to robust growth in focused segments (gross figures) -
Consumer credit grew 6.3% QoQ, 16.2% YoY.
Micro & small enterprises grew by 4.3% QoQ, 16.7% YoY. Mortgages grew by 6.6% QoQ, 17.1% YoY.
- Total equity increased by 2.7% to NIS 14.6 billion compared to Q2-16. Total equity grew by 6.0% in the last 12 months. Basel 3 Common Equity Tier 1 increased to 9.8%, supported by the capital raising in September 2016, which contributed 0.37% to the ratio.
RWA increased by 2.6% (NIS 3.8 bln), mainly due to credit growth.
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Cost/income ratio increased to a level of 76.9% compared to 65.3% in Q2-16. Adjusted Cost/income ratio stayed unchanged at a level of 74.6%.
ROE is 5.5% (6.4% adjusted), compared to 12.3% in Q2-16 (7.4% adjusted).
- Leverage ratio of 6.7%.
- Liquidity coverage ratio of 7.927%.
In NIS millions | 2016 | 2015 | % Change compared to | ||
Q3 | Q2 | Q3 | Q2 -16 | Q3 -15 | |
Interest income | 1,519 | 1,494 | 1,401 | 1.7 | 8.4 |
Interest expenses | 332 | 339 | 334 | (2.1) | (0.6) |
Interest income, net | 1,187 | 1,155 | 1,067 | 2.8 | 11.2 |
Credit loss expenses | 141 | 58 | 85 | 143.1 | 65.9 |
Net interest income after credit loss expenses | 1,046 | 1,097 | 982 | (4.6) | 6.5 |
Non-interest Income | |||||
Non-interest financing income | 51 | 428 | 30 | (88.1) | 70.0 |
Commissions | 675 | 633 | 650 | 6.6 | 3.8 |
Other income | 5 | 27 | 42 | (81.5) | (88.1) |
Total non-interest income | 731 | 1,088 | 722 | (32.8) | 1.2 |
Operating and other Expenses | |||||
Salaries and related expenses | 830 | 861 | 820 | (3.6) | 1.2 |
Maintenance and depreciation of buildings and equipment | 272 | 268 | 294 | 1.5 | (7.5) |
Other expenses | 373 | 335 | 306 | 11.3 | 21.9 |
Total operating and other expenses | 1,475 | 1,464 | 1,420 | 0.8 | 3.9 |
Income before taxes | 302 | 721 | 284 | (58.1) | 6.3 |
Provision for taxes on income | 126 | 272 | 102 | (53.7) | 23.5 |
Income after taxes | 176 | 449 | 182 | (60.8) | (3.3) |
Bank's share in income (loss) of affiliated companies, net of tax effect | 15 | (2) | 3 | - | 400.0 |
Net income attributed to the non-controlling rights holders in consolidated companies | (3) | (54) | (17) | (94.4) | (82.4) |
Net income attributed to Bank's shareholders | 188 | 393 | 168 | (52.2) | 11.9 |
Net return on equity attributed to the Bank's shareholders, in %⁽¹⁾ | 5.5 | 12.3 | 5.2 | ||
Net income attributed to Bank's shareholders - disregarding gains on the sale of rights in Visa Europe and a provision in ICC⁽²⁾ | 216 | 241 | 168 | (10.4) | 28.6 |
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 ICC⁽²⁾ | 6.4 | 7.4 | 5.2 | ||
Footnotes:
On an annual basis.
See Note 17 B and C to the condensed financial statements.
In NIS millions | Sept. 30, 2016 | Sept. 30, 2015⁽¹⁾ | Dec. 31, 2015⁽¹⁾ | % Change compared to | |
Sept.30, 2015 | Dec. 31, 2015 | ||||
Total assets | 213,451 | 206,914 | 205,260 | 3.2 | 4.0 |
Credit to the public, net | 139,315 | 123,592 | 127,216 | 12.7 | 9.5 |
Securities | 37,491 | 39,251 | 38,935 | (4.5) | (3.7) |
Deposits from the public | 164,892 | ⁽²⁾153,068 | ⁽²⁾157,875 | 7.7 | 4.4 |
Equity attributed to the Bank's shareholders | 14,154 | 13,309 | 13,288 | 6.3 | 6.5 |
Total equity | 14,568 | 13,747 | 13,634 | 6.0 | 6.9 |
Footnotes: | |||||
(1) Excluding balances classified as assets and liabilities held for sale - see Note 18 to the condensed financial statements. | |||||
(2) Reclassified - see Note 1 H to the condensed financial statements. | |||||
In NIS millions | September 30 2016 | ⁽²⁾December 31 2015 | Change in % |
Domestic operations: | |||
Households⁽¹⁾ | 50,663 | 44,573 | 13.7 |
Private banking⁽¹⁾ | 203 | 240 | (15.4) |
Small and minute businesses | 34,281 | 30,661 | 11.8 |
Medium businesses | 12,443 | 11,694 | 6.4 |
Large businesses | 21,621 | 20,313 | 6.4 |
Institutional bodies | 449 | 465 | (3.4) |
Total Domestic operations | 119,660 | 107,946 | 10.9 |
International operations: | |||
Private Individuals | 1,638 | ⁽¹⁾1,632 | 0.4 |
Business operations | 20,192 | ⁽¹⁾19,690 | 2.5 |
Total International operations | 21,830 | 21,322 | 2.4 |
Total credit to the public | 141,490 | 129,268 | 9.5 |
Credit loss expenses | (2,175) | (2,052) | 6.0 |
Total credit to the public, net | 139,315 | 127,216 | 9.5 |
(1)Of which - Mortgages | 25,053 | 21,808 | 14.9 |
Footnotes: | |||
(1) Reclassified - see Note 12 C (4) to the condensed financial statements. | |||
(2) Reclassified - see Note 12 C (3) to the condensed financial statements. | |||
Israel Discount Bank Limited published this content on 17 November 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 17 November 2016 07:18:04 UTC.
Original documenthttps://investors.discountbank.co.il/sites/investors.discountbank.co.il/files/IR_Media/Results_Center/2016/Financial_Reports/PR Q3-16 FINAL.pdf
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