15.08.2017
Israel Discount Bank Announces Financial Results for 2nd Quarter of 2017Net Income - NIS 272 m, ROE -- 7.5%, Cost-Income Ratio -- 67.8%
Main highlights of Q2-17 results:
Financial performance
› Top line growth supported mainly by credit growth in all targeted segments (in Israel) and margin growth
› Total expenses decrease driven by salary and related expenses decline
› Increase in expenses for credit losses
› Improvement in asset quality metrics
Capital and liquidity
› Strong capital position - increase in CET-1 capital ratio
› LCR and LR well above BOI target
Strategy execution
› Further deployment of our new CRM in branches
› New innovative service of digital AI based digital assistant
› New engagement with a Fintech company, iCount.
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=e070ffd6bf0b0d25ad04f7fc0a06784bc
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To join the conference call, please dial:
Israel: 1809216057
International: +44 (0) 1452 555566
USA: 18669669439
UK: 08006940257
Conference ID: 64229944
Main metrics from the Balance Sheet:
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Total credit to the public (gross) increased by 8.2% YoY (0.5% QoQ) to NIS 146.3 billion. Total credit to the public in Israel, grew by 10.5% YoY (1.3% QoQ), due to growth in all targeted segments:
Consumer credit grew by 11.5% YoY (1.2% QoQ)
SME credit grew by 10.2% YoY (1.6% QoQ)
Mortgages grew by 16.4% YoY (3.0% QoQ )
- Deposits grew by 5.8% YoY (stayed flat QoQ) to NIS 171.6 billion. Deposits in Israel, grew by 8.5% YoY (0.7% QoQ).
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Total equity grew by 8.7% YoY (1.5% QoQ) to NIS 15.4 billion, RWA increased by 6.0% YoY (0.7% QoQ) to NIS 156.9 billion. Common equity tier 1 ratio stands at a level of 9.8%.
Main metrics from the Statement of Income:
- Net interest income for Q2-17 increased by 12.9% YoY to NIS 1,304 m, as a result of a positive quantitative impact of NIS 37 m and a positive price impact of NIS 100 m.
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Non-interest income increased by 4.3% YoY to NIS 759 m compared to the adjusted corresponding quarter (excluding a NIS 360 m income from the sale of VISA rights). The increase is mainly due to a 4.4% increase in Commissions, particularly in credit cards and a
16.2 % increase in non-interest financing income, due to an increase in income resulting from the realization of investments made by Discount Capital.
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Financing income, which includes net interest income and non-interest financing income, totaled NIS 1,383 m, an increase of 13.1% compared to the adjusted financing income in Q2-16 as aforementioned.
The impact on financing income of the CPI increase was income of NIS 31 m, compared to an expense of NIS 7 m in the previous quarter and income of NIS 17 m in the corresponding quarter.
- Total operating & other expenses decreased by 4.5% to NIS 1,398 m compared to the corresponding quarter. Excluding a NIS 6 m provision for actuarial changes, (mainly due to retirements in Q2-17), and a NIS 40 m provision in CAL in connection with a legal procedure in Q2-16, total operating and other expenses decreased by 2.2%.
- Salary and related expenses decreased by 5.5% compared to the second quarter of 2016. Adjusted salary and related expenses (excluding the NIS 360 m income from the sale of VISA rights) declined by 6.2% compared to salary and related expenses in Q2-16.
- Credit loss expenses amounted to NIS 211 m, constituting a quarterly rate of 0.58% of the average balance of credit to the public. Q2-17 credit loss expenses were impacted mainly by write-offs of specific borrowers.
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Total credit to the public (gross) increased by 8.2% YoY (0.5% QoQ) to NIS 146.3 billion. Total credit to the public in Israel, grew by 10.5% YoY (1.3% QoQ), due to growth in all targeted segments:
Developments in certain profit and loss statement items in the first half of 2017, compared with the first half of 2016
For the six months ended June 30, | |||
In NIS millions | 2017 | 2016 | % Change |
Interest income | 3,140 | ⁽¹⁾2,712 | 15.8 |
Interest expenses | 669 | 508 | 31.7 |
Interest income, net | 2,471 | 2,204 | 12.1 |
Credit loss expenses | 356 | 104 | 242.3 |
Net interest income after credit loss expenses | 2,115 | 2,100 | 0.7 |
Non-interest Income | |||
Non-interest financing income | 304 | 524 | (42.0) |
Commissions | 1,327 | 1,257 | 5.6 |
Other income | 41 | 89 | (53.9) |
Total non-interest income | 1,672 | 1,870 | (10.6) |
Operating and other Expenses | |||
Salaries and related expenses | 1,673 | 1,720 | (2.7) |
Maintenance and depreciation of buildings and equipment | 524 | 541 | (3.1) |
Other expenses | 633 | 620 | 2.1 |
Total operating and other expenses | 2,830 | 2,881 | (1.8) |
Profit before taxes | 957 | 1,089 | (12.1) |
Provision for taxes on profit | 345 | ⁽¹⁾447 | (22.8) |
Profit after taxes | 612 | 642 | (4.7) |
Bank's share in loss of affiliated companies, net of tax effect | (7) | (3) | 133.3 |
Net profit attributed to the non-controlling rights holders in consolidated companies | (30) | (67) | (55.2) |
Net Profit attributed to Bank's shareholders | 575 | 572 | 0.5 |
Return on equity attributed to the Bank's shareholders, in %⁽²⁾ | 8.0 | 8.8 | |
Net Profit attributed to Bank's shareholders - disregarding certain components | 585 | 470 | 24.5 |
Return on equity attributed to the Bank's shareholders, in %⁽²⁾ - disregarding certain components | 8.1 | 7.2 |
Footnotes: | |
(1) | Reclassified, see Note 1 G (1) to the condensed financial statements. |
(2) | On an annual basis. |
Balance sheet
In NIS millions
June 30,
2017
June 30,
2016
December 31, 2016
% Change compared to
June 30,
Total assets | 218,393 | 208,882 | 219,577 | 4.6 | (0.5) |
Credit to the public, net | 144,217 | 133,092 | 140,760 | 8.4 | 2.5 |
Securities | 34,828 | 38,053 | 38,818 | (8.5) | (10.3) |
Deposits from the public | 171,598 | ⁽¹⁾162,155 | 172,318 | 5.8 | (0.4) |
Equity attributed to the Bank's shareholders | 14,972 | 13,769 | 14,512 | 8.7 | 3.2 |
Total equity | 15,418 | 14,181 | 14,936 | 8.7 | 3.2 |
2016
December 31, 2016
Footnote:
(1) Reclassified - see Note 1 G (2) to the condensed financial statements.
Developments in certain profit and loss statement items in the second quarter of 2017, compared with the first quarter of 2017 and compared with the second quarter of 2016
2017 2016
% Change
compared to
In NIS millions Q2 Q1 Q2
Q1 2017
Q2 2016
Interest income | 1,700 | 1,440 | 1,494 | 18.1 | 13.8 |
Interest expenses | 396 | 273 | 339 | 45.1 | 16.8 |
Interest income, net | 1,304 | 1,167 | 1,155 | 11.7 | 12.9 |
Credit loss expenses | 211 | 145 | 58 | 45.5 | 263.8 |
Net interest income after credit loss expenses | 1,093 | 1,022 | 1,097 | 6.9 | (0.4) |
Non-interest Income | |||||
Non-interest financing income | 79 | 225 | 428 | (64.9) | (81.5) |
Commissions | 661 | 666 | 633 | (0.8) | 4.4 |
Other income | 19 | 22 | 27 | (13.6) | (29.6) |
Total non-interest income | 759 | 913 | 1,088 | (16.9) | (30.2) |
Operating and other Expenses | |||||
Salaries and related expenses | 814 | 859 | 861 | (5.2) | (5.5) |
Maintenance and depreciation of buildings and equipment | 260 | 264 | 268 | (1.5) | (3.0) |
Other expenses | 324 | 309 | 335 | 4.9 | (3.3) |
Total operating and other expenses | 1,398 | 1,432 | 1,464 | (2.4) | (4.5) |
Profit before taxes | 454 | 503 | 721 | (9.7) | (37.0) |
Provision for taxes on profit | 163 | 182 | 272 | (10.4) | (40.1) |
Profit after taxes | 291 | 321 | 449 | (9.3) | (35.2) |
Bank's share in loss of affiliated companies, net of tax effect | (3) | (4) | (2) | (25.0) | 50.0 |
Net profit attributed to the non-controlling rights holders in consolidated companies | (16) | (14) | (54) | 14.3 | (70.4) |
Net Profit attributed to Bank's shareholders | 272 | 303 | 393 | (10.2) | (30.8) |
Return on equity attributed to the Bank's shareholders, in %⁽¹⁾ | 7.5 | 8.6 | 12.3 | ||
Net Profit attributed to Bank's shareholders - excluding certain components | 276 | 309 | 241 | (10.7) | 14.5 |
Return on equity attributed to the Bank's shareholders, in %⁽¹⁾ - excluding certain components | 7.6 | 8.8 | 7.4 |
Footnote: | |
(1) | On an annual basis. |
Review of developments in the balance of net credit to the public, by regulatory operating segments
In NIS millions | June 30, 2017 | December 31, 2016 | % Change |
Domestic operations: | |||
Households* | 54,183 | 51,488 | 5.2 |
Private banking* | 249 | 214 | 16.4 |
Small and minute businesses | 36,546 | 34,219 | 6.8 |
Medium businesses | 11,932 | 12,398 | (3.8) |
Large businesses | 22,310 | 21,438 | 4.1 |
Institutional bodies | 961 | 1,047 | (8.2) |
Total Domestic operations | 126,181 | 120,804 | 4.5 |
Total International operations | 20,111 | 22,100 | (9.0) |
Total credit to the public | 146,292 | 142,904 | 2.4 |
Credit loss expenses | (2,075) | (2,144) | (3.2) |
Total credit to the public, net | 144,217 | 140,760 | 2.5 |
*Of which - Mortgages | 27,354 | 25,764 | 6.2 |
Israel Discount Bank Limited published this content on 15 August 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 15 August 2017 05:36:03 UTC.
Original documenthttps://investors.discountbank.co.il/sites/investors.discountbank.co.il/files/IR_Media/Results_Center/2017/PR/PR Q2-17 FINAL.pdf
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