As with the other banks, the results of Israel Discount Bank (TASE: DSCT) have taken a hit from the coronavirus pandemic. This morning, Discount Bank reported a 31% drop in net profit in the first quarter of this year to NIS 279 million, compared with a profit of NIS 405 million in the corresponding quarter of 2019.
Return on equity was 6%, which compares with 9.6% in the corresponding quarter.
Incidentally, Discount Bank posted a higher first quarter profit than Bank Hapoalim, which reported a profit of just NIS 192 million, because of a jump in provisions for credit losses and a special provision for the settlement of the tax evasion affair in which the bank was involved in the US.
Discount Bank's credit loss expense jumped 365% in the first quarter of this year, in comparison with the corresponding quarter of 2019, to NIS 656 million, representing 1.42% of its credit portfolio.
Some of the credit loss expense was offset by non-interest income, which totaled NIS 1.2 billion, 30% more than in the corresponding quarter, mainly thanks to a growth in profits from the sale of bonds and from activity in derivatives.
The bank's employee compensation expense fell 2.7% in comparison with the corresponding quarter, to NIS 824 million.
Discount Bank's credit portfolio continued to grow, reaching NIS 183.2 billion at the end of the first quarter, 1.5% more than at the end of the previous quarter, and 7.6% more than at the end of the first quarter of 2019. Corporate credit and mortgages grew by 8.3% and 13.6% respectively in comparison with the first quarter of 2019.
Discount Bank, headed by Uri Levin, has a market cap of NIS 12.4 billion. Its share price is up 4.51% on the Tel Aviv Stock Exchange this morning.
Published by Globes, Israel business news - en.globes.co.il - on May 27, 2020
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