Israel Discount Bank Q2 profit sinks, offers early retirement plan

Credit: REUTERS/BAZ RATNER

Israel Discount Bank reported a smaller than expected 68% drop in quarterly profit amid a jump in credit loss expenses aimed to protect itself from potential bad loans stemming from the coronavirus outbreak.

JERUSALEM, Aug 27 (Reuters) - Israel Discount Bank DSCT.TA reported a smaller than expected 68% drop in quarterly profit amid a jump in credit loss expenses aimed to protect itself from potential bad loans stemming from the coronavirus outbreak.

Israel's fourth-largest bank by assets said on Thursday it earned 174 million shekels ($51 million) in the second quarter, compared with 545 million a year earlier but above a forecast of 128 million shekels in a Reuters poll of analysts.

Discount also said it would offer early retirement to 300 employees to be completed by year-end at a cost of 553 million shekels.

Net interest income fell 8.3% to 1.46 billion shekels, while credit loss expenses quadrupled to 532 million shekels.

Discount had allowed customers to delay mortgage and credit payments at the outset of the COVID-19 outbreak but said that from mid-May, it saw "significantly fewer requests for deferrals" and more accounts went back to paying.

"Throughout this period demand for credit decreased, especially in the household segment. On the other hand, mortgages, medium sized and corporate businesses demand remained strong," Discount said.

Discount's Tier 1 capital ratio stood at 10.08% in the second quarter, up from 9.99% at the end of March.

($1 = 3.3993 shekels)

(Reporting by Steven Scheer; Editing by Tova Cohen)

((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters Messaging: steven.scheer.thomsonreuters.com@reuters.net; Twitter: @StevenMScheer))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More