Discount Bank: Net Profit Grows 2.1% to NIS 4.3 Billion - Announces New Strategic Plan for 2030

Discount Bank reported a modest increase in net profit for 2024, reaching NIS 4.3 billion, up 2.1% from NIS 4.2 billion in 2023. However, the bank's return on equity (ROE) declined to 14.2%, compared to 15.7% in the previous year. Despite the slight dip in ROE, the bank posted solid results, driven by strong performance in the fourth quarter.

For Q4 2024, Discount Bank's net profit surged to NIS 1.1 billion, marking a 14.1% increase compared to NIS 919 million in Q4 2023. The bank will distribute a dividend of NIS 330 million to shareholders, representing 30% of its quarterly profit. In addition, Discount Bank repurchased 10% of its shares, a move that it likens to a dividend distribution.

Strong Growth in Credit Portfolio

As of the end of 2024, Discount Bank’s public credit portfolio totaled NIS 281.7 billion, reflecting an 8% growth compared to 2023. Credit to large businesses saw a notable rise of 11.9%, while credit to small and micro businesses increased by 4.2%. Credit to households, excluding housing loans, grew by 9.1%, and housing credit (mortgages) expanded by 6.1%.

The bank also reported a significant decrease in credit loss expenses, which amounted to NIS 702 million in 2024, down 53.3% from NIS 1.5 billion in 2023. This decrease is attributed to the recovery of the economy in 2024, following the increased credit loss provisions during the war in late 2023. The credit loss expense rate for 2024 was 0.26%, compared to 0.59% in 2023. The ratio of non-accruing credit to the public dropped from 0.90% in 2023 to 0.61% in 2024.

The bank’s efficiency ratio stood at 52.1% at the end of 2024.

Discount Bank's 2024 Performance Compared to Peers

Discount's results come after the major Israeli banks reported their financials for the year. Bank Hapoalim reported a net profit of NIS 7.6 billion, with a return on equity of 13.8%, while Bank Leumi posted a record net profit of NIS 9.8 billion, with an ROE of 16.9%. Mizrahi Tefahot also saw strong results, with a net profit of NIS 5.5 billion and an ROE of 18.5%.

In contrast to its peers, both Hapoalim and Leumi, which have already outlined strategic plans for 2025-2026, Discount Bank has unveiled its long-term vision, titled "Discount 2030."

Discount Bank Unveils Long-Term Strategic Plan

As part of its new strategic plan, Discount Bank aims for a net profit exceeding NIS 5.2 billion by 2030. The bank targets an efficiency ratio of less than 43% and a return on equity of at least 13.5% by the end of the decade. Discount Bank also plans to distribute up to 50% of its net profit as dividends by 2030.

The bank’s 2024 performance, although solid, highlights the ongoing challenges within Israel's banking sector, particularly against the backdrop of geopolitical uncertainties and economic volatility. With its "Discount 2030" plan, the bank is positioning itself for long-term growth, aiming to remain competitive as it navigates the evolving financial landscape.