Discount Bank's profits were cut 40% in Q3 toNIS 258 million - 540 employees will retire

Discount Bank's profits in the third quarter of 2020 were cut by 40% compared to the corresponding quarter last year, mainly due to non-recurring items.
The bank's net profit for the quarter was NIS 258 million and the return on equity was 5.5%. Excluding the non-recurring items, which include provisions for legal claims, expenses for retirement of employees and profits from the sale of global Visa shares, net income was NIS 357 million and return on equity was 7.7%, compared to a return of 9.7% in the corresponding quarter last year.
During the third quarter, Discount, under the management of Uri Levin, recorded an expense of NIS 330 million on credit losses, most of which was due to a group provision, in a similar trend to the other banks during the Corona crisis. The expense ratio for credit losses was 0.7% in this quarter.
Despite the corona, Discount shows continued growth in credit, which stood at 3.4% compared to the end of 2019 and 7.6% compared to the end of the corresponding quarter last year. Discount reports that it is possible for its customers (and customers of Mercantile Bank under its control) to defer loan payments amounting to NIS 18 billion from the outbreak of the corona crisis.
Of this amount, the Bank updated that loans amounting to NIS 11 billion were repaid (61% of deferred loans) and NIS 7 billion remained deferred. In detail by type of loan, Discount notes that about 61% of mortgages have been repaid, about 66% of loans to small businesses and about 50% of loans to households and individuals.
The bank also noted that since the beginning of the crisis, together with Mercantile, it has provided state-guaranteed loans to businesses affected by the corona in the amount of NIS 3 billion.
As part of the report, Discount announced that 540 employees of the bank have signed a voluntary retirement agreement proposed by the bank as part of its latest efficiency plan, and they are expected to complete their work by the end of the year. The number of employees who are expected to leave the bank by the end of 2021 is expected to stand at about 790 employees, including the employees who will retire naturally. The efficiency program increased the Bank's liabilities by NIS 545 million.