Israel Discount Bank (TASE: DSCT) reported its financial results for the third quarter of 2014 this morning. Net profit in the third quarter of 2014 was NIS 234 million, compared with NIS 276 million in the corresponding quarter of 2013. Excluding various changes to compensation provisions due to the early retirement plan, profit for the third quarter totaled NIS 254 million.
Net income had a return on equity (ROE) of 7.5%; 8.2% excluding provisions for the early retirement plan.
Loan loss provisions totaled NIS 40 million, compared with NIS 171 million in the corresponding quarter of last year.
In the first nine months of the year, profit totaled NIS 591 million, compared with NIS 802 million in the corresponding period of 2013, a drop of 26.3%. Excluding changes in compensation provisions due to the early retirement plan, profit in the first nine months of 2014 totaled NIS 732 million, a drop of 8.7% in profit.
Net return on equity for the first nine months of 2014 was 6.3% on an annualized rate, compared with 9.0% in the corresponding period of last year, and 7.35% for all of 2013. Excluding changes to the compensation provisions, net return on equity for the first nine months of 2014 was an annualized rate of 7.8%.
Expenses on credit losses dropped 82% to just NIS 80 million, compared with NIS 457 million in the corresponding period of 2013.
Discount Bank CEO Lilach Asher-Topilski said, "The results of the third quarter of 2014 indicate progress in achieving the goals of the group. The results reflect the continued strengthening of the capital base beyond the regulatory requirement, and continued improvement in the quality of the credit portfolio, including growth in the volume of retail credit, since the beginning of the year. In August this year, the strategic plan for the Discount Group was approved. The five-year plan stands on three principal pillars: extensive cost reduction, growth in the retail segment, and assimilation of an organizational culture which supports change.
“Following the approval of the strategic plan, we proceeded from the planning stage to the implementation stage. A transformation office has been established and enterprise-wide projects have been launched, which are aimed at attaining the goals of the strategic plan. Within the framework of the transformation measures already initiated, emphasis has been placed on the strict management of expenses, and on directing resources to activities within the strategic focus. As part of this, an early retirement plan has been launched which is designated for 250 employees of the Bank. The plan is currently being implemented, and is progressing as planned. Several days ago, Mercantile Discount Bank also approved an early retirement plan, and a provision in the amount of NIS 33 million has been made in the current quarter in favor of this plan.”
Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2014
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