Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Israel Discount Bank Rises on Bets Strategy to Boost Profit

Aug. 20 (Bloomberg) -- Israel Discount Bank Ltd., the country’s third-largest publicly-traded lender by assets, advanced the most in more than a week on expectation a five year-plan to cut costs will raise profit.

The shares climbed 1.4 percent, the most since July 29, to 6.005 shekels at the close in Tel Aviv. They were the best performers on Tel Aviv’s benchmark share gauge today. The TA-25 Index of stocks declined 0.3 percent.

Discount’s board approved a five-year plan that includes cutting more than 1,000 jobs, most of which by 2017, the bank said in a statement today. The lender has an efficiency ratio of 86.9 compared with 62.20 for Bank Hapoalim BM and 67.84 at Bank Leumi Le-Israel Ltd., the country’s two largest banks, according to data compiled by Bloomberg. The ratio measures the effect of expenses on revenue. Discount’s second-quarter profit slumped 27 percent to 192 million shekels ($54.4 million).

“The strategy announcement is good news as it will help the bank become more efficient,” Adi Scop, financial services analyst at Tel Aviv-based I.B.I.-Israel Brokerage & Investments Ltd. said today by phone. “In coming quarters, we should see a gradual drop in salary expenses which will trickle down also to profit.”

Discount’s shares declined 9.4 percent this year, more than double the 2.9 percent drop in the Tel Aviv Banking Index, as the lender sought to cut costs amid falling interest rates and tougher capital requirements.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net Dana El Baltaji

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.