Israel Discount Bank (DSCT) investor relations material

Executive summary

• Achieved strong 2025 results with net income of ILS 4.14 billion (NIS 4,140m) and ROE of 12.6%; adjusted net income (excluding one-offs) was ILS 4.5 billion, ROE 13.7%.

• Loan book grew by 8% (7.9% year-over-year), with 61% of growth from corporate, 26% from mortgages, and SME loans up 44% year-over-year; credit quality improved as problematic debt dropped to 1.85%.

• Cost efficiency improved, with cost income ratio at 49.2% for the group and 46.9% for Israeli banking activity; cost-to-asset ratio declined to 1.44%.

• Paid out 47% of 2025 net earnings via dividends and buybacks, totaling NIS 1,966m.

• Strategic initiatives included streamlining subsidiaries, reducing FTEs, major management changes at Mercantile and IDB New York, and the pending sale of CAL.

Financial highlights

• Net income for 2025: ILS 4.14 billion (NIS 4,140m); adjusted net income: ILS 4.5 billion.

• ROE: 12.6% (reported), 13.7% (adjusted for one-offs); Q4 net income: ILS 856 million, ROE 10.2%.

• Efficiency ratio improved to 46.9% for 2025; group cost income ratio: 49.2%.

• CET1 capital ratio: 10.38%, well above regulatory requirements.

• Loan loss expenses remained low at 16 basis points for the year; NII change was 0.7% year-over-year.

Outlook and guidance

• Expect strong loan demand as Israeli economy rebounds, with GDP projected to grow over 5% (5.2%) in 2026.

• Private consumption and investments projected to drive growth, with private consumption growth at 7.5% and fixed investment growth at 13% in 2026.

• Easing monetary policy and resilient labor market expected to support credit quality.

• Strategic focus on cost reduction, efficiency, and technological innovation, including 20 main efficiency projects and digital transformation.