Israel Discount Bank (TASE: DSCT) today reported lower revenue and profits for the first quarter of 2014.
Net interest income fell 5% to NIS 1.02 billion for the first quarter from NIS 1.04 billion and non-interest income both fell 6% to NIS 807 million from NIS 895 million, mainly because of an 8% drop in commissions. Net profit fell 37% to NIS 165 million for the first quarter from NIS 265 million for the corresponding quarter. The expense for credit loss was nearly halved to NIS 75 million for the first quarter from NIS 145 million for the corresponding quarter.
Nonetheless, Discount Bank achieved a core Tier-1 capital adequacy ratio of 9.1%, ahead of its target.
"Against the backdrop of several external factors which negatively affected our results, such as the declining interest rate, the negative CPI, the implementation of FAS91, and the change in the accounting presentation of the investment in FIBI's shares, coupled with restrained credit growth and labor sanctions, the Discount Group succeeded in achieving several important objectives," said Discount Bank CEO Lilach Asher-Topilsky. She added that the bank would meet its Basel III core Tier 1 capital adequacy ratio target of 9.3-9.4% by the end of 2014, which will allow the bank to return to Risk Weighted Assets growth in 2015."
"At the same time, our main challenge was and remains improving our Cost/Income ratio and restraining our costs. The cost program will be the main focus of our strategic plan, which will be presented at the end of August," concluded Asher-Topilsky.
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2014
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