Israel Discount Bank Surges as 2Q Profit Rises: Tel Aviv MoverShoshanna Solomon
Israel Discount Bank Ltd. advanced the most in almost eight months after the country’s third-largest lender by assets reported a profit that beat estimates.
The shares rose 4 percent, the most since January 1, to 5.75 shekels at the close in Tel Aviv. The benchmark TA-25 Index of stocks gained for the first time in seven day, adding 0.7 percent. The Tel Aviv Banking index of the country’s five largest commercial banks advanced 1.4 percent.
Discount Bank said second-quarter profit rose 59 percent to 263 million shekels ($72 million) and financing income rose to 236 million shekels from 37 million shekels in the same period a year earlier. I.B.I.-Israel Brokerage & Investments Ltd. forecast a profit of 200 million shekels and Excellence Nessuah forecast a profit of 247 million shekels, according to data compiled by Bloomberg. The net return on equity for the bank surged to 9 percent from 6.1 percent in the same quarter a year earlier.
“The banks are continuing to show strong profits,” Adi Scop, financial services analyst at Tel Aviv-based I.B.I., said today by phone. “This could be an indication the other banks will also report healthy results tomorrow.”
Bank Hapoalim Ltd. and Bank Leumi Le-Israel Ltd., the country’s two largest lenders, are scheduled to post second-quarter results tomorrow, according to data compiled by Bloomberg.
Before today the stock declined 9.9 percent this year as the lender has been struggling to cut costs. About 60 percent of operational expenses at Israeli banks stem from salaries, the most of any country in the Organization of Economic Cooperation and Development after Denmark and compared with an average of 47 percent, according to Bank of Israel data.
The lender said on Aug. 21 that Chief Executive Officer Reuven Spiegel, who headed the bank’s cost-cutting plan, will resign in March.