Israel Discount Bank (DSCT) Q1 2025 earnings summary

Executive summary

• Achieved net income of NIS 1.036 billion (ILS 1.036 billion) for 1Q25, with ROE at 13.0%, reflecting robust performance and efficiency ratio at 53.4%.

• Credit growth remained strong at 2.1% QoQ and 9.3% YoY, with stable asset quality and low credit loss provisions.

• Dividend policy raised to 50% of net income, with actual payout and buyback totaling 40% for 1Q25.

• Expenses were contained, supporting improved cost-income ratio.

Financial highlights

• Net interest income rose 2.5% QoQ and 4.7% YoY to NIS 2,655m; fee income increased 3.8% QoQ and 15.5% YoY.

• Credit loss expense at 0.16% of loans; NPL ratio at 0.69%, returning to pre-war levels.

• Total assets stood at NIS 435.6bn, with deposits from the public at NIS 326.6bn.

• CET-1 ratio at 10.54%, NIM at 2.65%, efficiency ratio at 53.4%.

• Credit portfolio grew 2.1% QoQ and 9.3% YoY, led by corporate segment growth.

Outlook and guidance

• Israeli GDP growth projected at 3.5% for 2025 after 0.9% in 2024; job market remains resilient with unemployment below 3%.

• Only one rate cut expected by year-end, with CPI anticipated to decline toward 2% target.

• Management confident in sustaining profitability and credit growth even if conflict persists.

• NIM pressure expected to continue due to shrinking credit spreads.

• Economic stability persists, but growth drivers such as housing sales and private spending remain uncertain.