Israel Discount Bank (DSCT) Q2 2025 earnings summary

Executive summary

• Achieved net income of NIS 1.12B in Q2 2025, with ROE at 13.6% and efficiency ratio at 46.1%; banking in Israel segment posted NIS 1.1B net income and 18.1% ROE.

• Strong credit growth of 1.9% QoQ (8.8% YoY), with banking in Israel up 3.6% QoQ, led by corporate, SME, and mortgage segments.

• Implemented a new collective labor agreement, enhancing flexibility and reducing costs by 30% compared to the previous agreement.

• Dividend payout raised to 50% of net profit, the highest in history, and share buyback of 10% of net profit announced.

• CAL was classified as a discontinued operation and held for sale.

Financial highlights

• Net interest income grew 10% QoQ, supported by high CPI impact (NIS 277M), and fee income rose 1.5% QoQ.

• Cost-income ratio improved to 46.1% from 48.8% in Q1 2025.

• Total revenues increased 7.4% QoQ and 4.1% YoY; net income attributable to shareholders up 7.6% QoQ and 6.7% YoY.

• Adjusted net income for Q2 2025 was NIS 1.27B, reflecting one-time VAT court provision related to CAL.

• Total assets reached NIS 461B, with deposits from the public at NIS 339B.

Outlook and guidance

• GDP growth expected to rebound in 2025 and accelerate in 2026 after war-related slowdown in 2024.

• Bank of Israel expected to reduce rates gradually; inflation projected to converge within target range.

• Management raised dividend distribution to 50% of net profit, reflecting confidence in ongoing performance.

• Forward-looking statements caution that future results may differ due to external and operational risks.