Israel Discount Bank (TASE: DSCT) reported lower profit for the second quarter of 2014 after setting aside funds for the early retirement of 250 employees over the next year. Net profit in the second quarter fell 27% to NIS 192 million from NIS 263 million in the corresponding quarter. Without the special expenses for early retirement and other programs second quarter profit would have been NIS 313 million, a 19% rise.
In the report, Discount Bank elaborated on its strategic plan, which it said has three central pillars the first involving layoffs and early retirement of 1,000 staff. "Reducing the size of the Discount Group’s workforce by more than 1,000 employees, some 700 of whom will leave by the end of 2017. This reduction is based on the natural retirement of approximately 600 employees during the period of the plan, and on an early retirement program, under which some 250 employees will retire from the Bank during the coming year. The financial statements include a provision for the planned retirement program."
The other two "pillars" are selling off real estate and closing 10 branches.
The bank reported net return on equity of 6.3% in the second quarter compared with 9% in the corresponding quarter of 2013. Without the aforementioned special expenses net return on equity would have been 10.3%.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2014
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