Israel Discount Bank (TASE: DSCT) reported a net profit of NIS 905 million for 2016 today, 21% more than in 2015. The 2016 profit represents a return on equity of 6.6%, which compares with a return of 5.8% in 2015. Excluding certain components (among them the profit on the sale of the bank's rights in Visa Europe, voluntary layoff programs and an expense related to the settlement in CAL) the net profit for 2016 totaled NIS 980 million, representing an increase of 22% over the profit for 2015, and return on equity was 7.2% in 2016 and 6.2% in 2015.
Net profit in the fourth quarter of 2016 was NIS 145 million, representing growth of 141% over the fourth quarter of 2015. Excluding certain components, net profit in the quarter was NIS 284 million, 150% more than in the fourth quarter of 2015.
Net interest income totaled NIS 4.56 billion in 2016, 8.1% more than in 2015. Fourth quarter net interest income grew 12% in comparison with the corresponding quarter to NIS 1.17 billion.
Credit to the public grew 10.6% in 2016 to NIS 141 billion. Retail credit grew 13.5% while housing loans grew 18%.
The provision for credit losses was NIS 224 million in the fourth quarter, which compares with NIS 98 million in the corresponding quarter of 2015. Provisions for credit losses totaled NIS 469 million in 2016, 150% more than in 2015.
In the press conference following release of the results, Discount Bank CEO Lilach Asher-Topilsky said that the banking system's credit portfolio was of high quality, but admitted that there had been problems in collection, as did Mizrahi Tefahot Bank (TASE:MZTF) CEO Eldad Fresher last week. Asher-Topilsky attributed the difficulties to changes in legislation. "It is becoming ever easier to go bankrupt. It must be taken into account that, in the end, these changes will affect the ability to grant credit and the price of credit," she said.
Asher-Topilsky's compensation cost was NIS 5 million in 2016, 53% more than in 2015 when she did not receive bonuses. Asher-Topilsky's compensation comprised a basic salary of NIS 2.3 million and bonuses of NIS 1.68 million, plus various employer contributions and benefits.
The compensation cost of chairman Dr. Yossi Bachar was NIS 2.8 million, comprising a basic salary of NIS 2.3 million plus contributions and benefits. Bachar did not receive bonuses in 2016.
Published by Globes [online], Israel business news - www.globes-online.com - on March 28, 2017
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