1Q18 Financial Results Highlights of 1Q18 Solid Execution of our - - PowerPoint PPT Presentation

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1Q18 Financial Results Highlights of 1Q18 Solid Execution of our - - PowerPoint PPT Presentation

Jan 04, 2024 217 likes •415 views

1Q18 Financial Results Highlights of 1Q18 Solid Execution of our Financial and Strategic Plans Net Income Financial Highlights NIS 319 m Net Income is up 5.3% Y-o-Y (1Q17: NIS 303 m) Credit Loss Expenses were 22.8% lower Y-o-Y

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1Q18

Financial Results

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Highlights of 1Q18

Solid Execution of our Financial and Strategic Plans

  • Consumer operating model roll out nearly complete
  • New Business Banking Website and Cash Management launched
  • IDBNY embarked on it’s 5 Year Strategic Plan
  • CAL successfully launched Shufersal Club, over 300,000 new members in 1Q18 alone

Net Income NIS 319 m

(1Q17: NIS 303 m)

ROE 8.4%

(1Q17: 8.6%)

Cost-Income Ratio 70.3%

(1Q17: 68.8%)

Core Tier-1 Ratio 9.8%

(1Q17: 9.7%)

  • Net Income is up 5.3% Y-o-Y
  • Credit Loss Expenses were 22.8% lower Y-o-Y
  • Credit to the Public is up 7.0% Y-o-Y, up 3.2% in 1Q18
  • First Dividend payout after 20 years, 10% of net income

Financial Highlights Strategic Highlights

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Income Statement Highlights

  • Vs. 1Q 17
  • Vs. 4Q 17

1Q17 4Q17 1Q18

9.2% (1.8%) 1,167 1,297 1,274 Net Interest Income (22.8%) 261.3% 145 31 112 Credit Loss Expenses (11.0%) (1.7%) 913 827 813 Non-interest, Fees and other income 2.5% (1.5%) 1,432 1,491 1,468 Total Expenses 5.3% (14.0%) 303 371 319 Net Profit attributed to Shareholders

P&L Highlights (NIS m) Key Financial Metrics

1Q17 4Q17 1Q18

8.6% 10.0% 8.4% Return on Equity 68.8% 70.2% 70.3% Cost Income Ratio 2.22% 2.46% 2.40% Interest Spread

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Solid Balance Sheet Supports Growth

7.0% Loan Growth and 7.9% Total Equity Growth

219.1 221.2 228.8

1Q17 4Q17 1Q18

Total Assets (NIS Bn)

3.4% 4.4%

171.6 175.2 181.1

1Q17 4Q17 1Q18

Deposits from the Public (NIS Bn)

3.4% 5.5%

15.2 16.1 16.4

1Q17 4Q17 1Q18

Total Equity (NIS Bn)

1.9% 7.9%

143.5 148.8 153.6

1Q17 4Q17 1Q18

Credit to the Public, net (NIS Bn)

3.2% 7.0%

1Q 17 4Q 17 1Q 18

9.7% 10.0% 9.8% Common Tier-1 6.6% 6.8% 6.6% Leverage Ratio 150.8% 126.7% 135.1% LCR

Key Financial Ratios

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143.5 148.8 153.6 1Q17 4Q17 1Q18

Credit to the Public, net (NIS Bn)

31.8 32.7 35.2 1Q17 4Q17 1Q18

Corporate (Bn)

7.8% 11.0%

29.9 30.8 31.3 1Q17 4Q17 1Q18

Micro & small enterprises (Bn)

1.6% 4.6%

25.9 27.5 27.9 1Q17 4Q17 1Q18

Consumer credit (Bn)

1.8% 7.7%

26.5 28.9 29.5 1Q17 4Q17 1Q18

Mortgages (Bn)

2.2% 11.2%

Credit Growth Continues Across all Segments

Particular Strength in Corporate Credit

7.0% 3.2%

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Y-o-Y Change +5.6% +11.4%

Income from Regular Banking Activity & Fees Increasing

Income From Banking and Finance Activity (NIS m)

1,197 1,319 1,333 195 195 72 72 45 45 666 696 703 2,058 2,087 2,081 1Q17 4Q17 1Q18 Income from regular financing activity * Other Fees

1.1% 1.0%

* Excludes CPI, income from realization and adjustment to fair value of bonds, investments in shares, loans sold, adjustments to fair value of derivative instruments.

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Income from Core Banking Activities Trending Up

Core Banking Activities (NIS m)

1,095 1,130 1,169 1,200 1,197 1,255 1,270 1,319 1,333 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

2.2% Compound quarterly growth rate

* Excludes CPI, income from realization and adjustment to fair value of bonds, investments in shares, loans sold, adjustments to fair value of derivative instruments.

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(3.0%) Y-o-Y Change 11.0% 0.6%

Group Expenses

Disciplined Expense Management Remains Top Priority

Total Expenses, Group (NIS m)

* Includes ILS 31 million reversal from tax assessment of excess provisions 813 824 818 264 272 256 355 395 394 1,432 1,491 1,468 1Q17 4Q17 1Q18 Salary & Related (reported) Maintenance and dep. Other

*

(0.7%) (5.9%) (0.3%)

2.5%

(1.5%)

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13.0 13.6 14.9 16.1 16.4 9.4 9.5 9.8 10.0 9.8 10.0 2014 2015 2016 2017 1Q18 2019 Total Equity CET 1 Ratio

Adequate Capital & Liquidity Position

Supporting Future Growth

Total Equity (NIS Bn) and Core Tier-1 Capital Ratio Liquidity Coverage Ratio (LCR)

Target

150.8% 126.7% 135.1% 1Q17 4Q17 1Q18

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Credit Loss Expenses

Credit Loss Expenses (NIS m) Group Provisions (NIS m)

Long term average range 0.4% - 0.5% 2017: 0.39% 2016: 0.34% Credit loss expenses Credit loss expenses / average balance of credit 58 141 224 145 211 187 31 112 0.18% 0.42% 0.66% 0.40% 0.58% 0.51% 0.08% 0.29%

2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

Group Provisions Remain Below 2017 Average Rate

82 143 147 157 145 159 88 120

2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

Average Group Provision: ILS 130m

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Further Decline in Problematic Credit Risk

* Coverage Ratio - Allowance for credit losses\ (Impaired credit + Non-impaired credit in arrears for 90 days and over)

Credit Quality Indicators

1.5% 0.9% 0.8%

1Q17 4Q17 1Q18

NPL / Total Credit (gross) 68.5% 83.2% 89.5%

1Q17 4Q17 1Q18

Coverage Ratio 1.8% 1.4% 1.3%

1Q17 4Q17 1Q18

Impaired Debt / Total Credit (gross) 1.4% 1.4% 1.4%

1Q17 4Q17 1Q18

Allowance for LLPs/ Total Credit (gross)

Credit Risk by Classification (NIS B)

1Q18 Vs. 1Q17

  • 687
  • 895
  • 146
  • 62

2,854 2,307 2,167 692 766 630 1,645 1,583 1,499 5,191 4,656 4,296 1Q17 4Q17 1Q18 Impaired Substandard Special Mention

(24.1%) (17.2%) (8.9%) (9.0%)

Quality Indicators Trending Positively

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Subsidiaries at a Glance

Strong Start of the Year at Mercantile and IDBNY

50 49 29 13.8% 12.5% 7.1% 1Q17 4Q17 1Q18 Net income (NIS m) ROE, % 41 62 77 7.5% 10.8% 13.0% 1Q17 4Q17 1Q18 Net income (NIS m) ROE, % 16 18 30 7.3% 7.6% 13.3% 1Q17 4Q17 * 1Q18 Net income (USD m) ROE, %

USD (m)

* Excludes a USD 16 m impact of the US tax reform. Including this impact, Net Income was USD 2m USD and ROE was 0.9%

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Clear Strategy Guides Ahead

Main Focus Areas for 2018

Growth & Efficiency

  • Invest in driving top line growth
  • Disciplined cost management
  • Progress towards 2021 targets
  • 60% CIR
  • 10% ROE

Transforming traditional banking

  • Complete roll-out of CRM and

consumer operating model

  • Launch pilot for small business
  • perating model
  • New digital solutions
  • Roll out new Cash Management

systems Developing new banking models

  • Further develop innovative

solutions including Paybox, iCount and Didi

  • Advance additional initiatives

from pipe line Superior customer satisfaction Reached through meeting customers expectations and needs

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Appendix

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Improvement of Financial Performance

Main P&L Metrics

Compared to Actual 1Q17 4Q17 1Q17 4Q17 1Q18 NIS m 9.2% ( 1.8% ) 1,167 1,297 1,274 Interest income, net ( 22.8% ) 261.3% 145 31 112 Credit loss expenses ( 53.8% ) 10.6% 225 94 104 Non-interest financing income 5.6% 1.0% 666 696 703 Commissions ( 72.7% ) ( 83.8% ) 22 37 6 Other income ( 11.0% ) ( 1.7% ) 913 827 813 Total non-interest income 0.3% ( 1.7% ) 2,080 2,124 2,087 Total income 0.6% ( 0.7% ) 813 824 818 Salaries and related expenses ( 3.0% ) ( 5.9% ) 264 272 256 Maintenance & depreciation 11.0% ( 0.3% ) 355 395 394 Other expenses 2.5% ( 1.5% ) 1,432 1,491 1,468 Total operating and other expenses 0.8% ( 15.8% ) 503 602 507 Income before taxes 5.3% ( 14.0% ) 303 371 319 Net income attributable to shareholders

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CAL Financial Performance

Main P&L and Balance Sheet metrics

1Q17 4Q17 1Q17 4Q17 1Q18 ILS (m) 11.5% 0.7% 252 279 281 Credit card transactions 9.9% 0.9% 101 110 111 Net interest income ( 50.0% ) 100.0% 8 2 4 Non-interest financing income 9.7% 1.3% 361 391 396 Total income 48.1% 29.0% 27 31 40 Credit loss expenses 22.8% 10.6% 290 322 356 Total expenses ( 43.7% ) ( 42.0% ) 71 69 40 Income before tax ( 42.0% ) ( 40.8% ) 50 49 29 Net income ILS (Bn) 15.6% 7.6% 12.6 13.6 14.6 Total Credit Card debt 15.6% 7.7% 13.1 14.1 15.1 Total assets 14.5% 2.5% 3.7 4.2 4.3 Consumer credit 12.1% 1.7% 1.5 1.7 1.7 Total equity

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IDBNY Financial Performance

Main P&L and Balance Sheet metrics

1Q17 4Q17 1Q17 4Q17 * 1Q18 ILS (m)

21.9% 8.5% 49 55 60 Net interest income ( 198.0% ) ( 248.5% ) 5 3 ( 5 ) Credit loss expenses ( 7.6% ) 56.6% 16 10 15 Non-interest income 9.5% 12.2% 38 37 41 Operating & other expenses 70.7% 56.6% 22 24 38 Income before tax 84.0% 68.8% 16 18 30 Net income

USD (Bn)

( 1.8% ) ( 1.9% ) 9.31 9.32 9.14 Total assets 4.4% 0.9% 5.68 5.87 5.93 Loans, net ( 3.1% ) 6.8% 2.76 2.50 2.67 Securities 0.1% ( 4.6% ) 7.38 7.74 7.39 Deposits from the public 2.6% 1.2% 0.89 0.90 0.91 Total equity * 4Q17 Net Income excludes a USD 16 m impact from the US tax reform. Including this impact, Net Income was USD 2m USD.

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Mercantile Financial Performance

Main P&L and Balance Sheet metrics

1Q17 4Q17 1Q17 4Q17 1Q18 ILS (m)

9.1% ( 1.1% ) 241 266 263 Net interest income ( 56.3% ) ( 66.7% ) 32 42 14 Credit loss expenses 18.1% 6.5% 83 92 98 Total Non-interest income 1.8% 2.2% 226 225 230 Operating & other expenses 77.3% 28.6% 66 91 117 Income before tax 87.8% 24.2% 41 62 77 Net income

ILS (Bn)

7.5% 2.6% 32.57 34.14 35.02 Total assets 6.9% 1.5% 22.72 23.94 24.29 Credit to the public, net ( 31.4% ) ( 17.2% ) 6.12 5.08 4.20 Securities 7.5% 3.0% 27.62 28.84 29.71 Deposits from the public 10.8% 3.0% 2.30 2.47 2.55 Total equity

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This document has been prepared by Israel Discount Bank Ltd. )the “Bank”( solely for use by the Bank in its presentation of its Q1-18 reports, as well as in strategic updates referred to in the Bank’s reports. The information contained herein may be partial and may include information that has not been independently verified. It is emphasized that this presentation does not constitute an offer or invitation

  • r recommendation to purchase any securities and/or investments whatsoever.

This presentation should not be relied upon in connection with any transaction, contract, commitment

  • r investment. For a full and complete overview of the Bank’s financial position and results of
  • perations, please view the Bank’s report for Q1-18 and 2017.

Neither the Bank nor any of its employees, officers, directors or representatives shall have any liability whatsoever for any loss and/or damages, howsoever arising, directly or indirectly, from any use of this presentation or its content or any part thereof. It is further emphasized that no representation or warranty whatsoever is given as to the achievement

  • r fulfillment of any forecasts about the future prospects of the Bank, and the actual results of the Bank

may differ materially from those contemplated, taking into account the various risk factors, changing economic conditions and uncertainties which exist regarding the Bank’s business and the results of various operations. For further details see the Forward Looking Information section in the Bank’s financial statements.