Discount Group Reports Strong Financial Results Amidst High Interest Rate Environment

High-interest rate environment, banks are reaping substantial profits, a trend exemplified by the impressive performance of the Discount Group. The Group recently released its financial results for the first half of 2023, underscoring its robust growth and profitability.

• Net Profit Surges: The Discount Group saw its net profit for the first half of the year soar to approximately NIS 2.46 billion, a substantial increase from NIS 1.66 billion during the same period last year. This remarkable growth represents a 48% surge in net profit.

• Return on Capital Strengthens: The Group's return on capital stood at an impressive 19.0% for the first half of 2023, a marked improvement from the 14.9% recorded in the corresponding period the previous year.

• Operational Efficiency: The Discount Group demonstrated an enhanced operational efficiency ratio, with a figure of 46.8% for the first half of the year, compared to 57.2% during the same period in the prior year.

• Credit Portfolio Expansion: Despite a noticeable economic slowdown, the Group managed to achieve a credit portfolio growth of 5.1% during the first half of the year.

• Preparation for Fintech Expansion: The Bank of Israel recently granted approval for the establishment of Greenlend, a fintech company focused on digital credit provision. The company is gearing up for its launch in the upcoming months.

• Dividend Policy Update: The Discount Group is increasing its dividend payment policy, with dividends set to encompass up to 40% of the net profit. In the second quarter of this year, the dividend will amount to NIS 356 million, equivalent to 30% of the profit.

• Quarterly Profits Surge: In the second quarter of 2023 alone, the Group achieved a net profit of approximately 1.19 billion shekels, marking a significant increase of about 75% compared to the same quarter in the previous year.

• Continued Growth Trajectory: The Discount Group's success is further demonstrated by its growth in various aspects. Total revenues for the second quarter of 2023 reached NIS 4.1 billion, a 41% increase from the corresponding period last year. Total capital, total assets, and credit to the public all experienced growth of 9%, 4%, and 5.1% respectively.

• Credit Distribution Strategy: The increase in credit to the public can be attributed to the strategic expansion in certain zip codes. Housing credit, credit for medium-sized and large businesses, as well as credit for households without housing loans, all contributed to this growth.

• Credit Loss Expenses: The Group experienced an expense for credit losses of 312 million shekels in the second quarter of 2023, compared to 131 million shekels during the same quarter the previous year. This was due to a variety of factors, including individual and group-based expenses, qualitative adjustments, and changes in credit components.

The Discount Group's resilience and adaptability in navigating the current economic landscape are evident in its impressive financial results. As it continues to make strategic moves and achieve remarkable growth, its position in the banking sector remains strong.