Israel Discount Bank Announces Q4 & FY 2010 Financial Results

TEL AVIV, Israel, March 31, 2011 - Israel Discount Bank Limited (TASE: DSCT), one of Israel's
leading banks, today reported Q4 and FY 2010 financial results:

FINANCIAL HIGHLIGHTS FOR 2010:

Net Income - NIS 724 million compared with NIS 923 million in
2009, a decrease of 21.6%

Return on Equity for 2010 - 6.9% compared with 9.8% in 2009

FINANCIAL HIGHLIGHTS FOR Q4/2010:

Net Income Q4/2010 - NIS 135 million compared to NIS 154 million
in Q4/2009

Return on Equity Q4/2010 - 5.1% compared to 6.3% in Q4/2009

Capital Adequacy Ratio (Basel II) - 13.7%

Tier-1 Capital Ratio - 8.5%

Core Tier-1 Ratio - 7.9%

Main factors affecting the Group's NET INCOME in 2010, compared to the
corresponding period:

- An increase of 1.5% in income from financing activities before
provision for doubtful debts.

- A decrease of 17.7% in Provisions for Doubtful Debts.

- A decrease of NIS 40 million in Tax Provisions.

- Income from Affiliates amounted to NIS 186 million, compared to NIS 158
million in 2009, an increase of 17.7%.

MAIN FACTORS negatively impacting NET INCOME IN 2010:

- A decrease of 13.9% in Operating and Other Income; a decrease of NIS 86
million in Commissions, primarily from credit card commissions; a decrease of
NIS 178 million in Other Income, mostly due to a decline in profits of the
employee severance compensation fund, and a decline of NIS 166 million in
profits from investments in shares.

- An increase of 2.6% in Operating and Other Expenses, due to an increase
of 0.5% in salary expenses and an increase of 11.2% in Depreciation
and Other Expenses.

MAIN BALANCE SHEET DEVELOPMENTS IN 2010:

- Total Assets of the Discount Group decreased by 1%, amounting to NIS
185.8 billion, compared to NIS 187.8 billion in 2009.

- Credit granted to the Public increased by 3.7%, amounting to NIS 118.7
billion, compared to NIS 114.4 billion in 2009.

- Deposits from the Public decreased by 2.7%, amounting to NIS 138.0
billion, compared to NIS 141.8 billion in 2009.

- Shareholders' Equity increased by 12.5%, to NIS 11.2 billion, compared
to NIS 10 billion in 2009.

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LETTER FROM THE CHAIRMAN AND CEO OF DISCOUNT BANK

This past year has been a challenging one for the Discount
Group. The bank's activities in 2010 focused on further strengthening our
capital base, on implementing organizational and structural changes and on
formulating a corporate strategy. In 2010, the Bank's Net Income was NIS 724
million and the Return on Equity was 6.9% - a result that in our opinion does
not reflect the potential profitability of the Discount Group.

This year too, the bank's subsidiaries continued to constitute
an important and central factor in the success of the Group: The positive
trend in the results of IDB New York continued and it posted record profits
of $51 million; Mercantile Discount Bank closed the year with Net Income of
NIS 147 million; and, despite being confronted by business and organizational
challenges, Israel Credit Cards (ICC) closed the year with Net Income of NIS
215 million and distributed a dividend of NIS 150 million.

During the year, the bank successfully completed a capital
issuance of NIS 450 million in Tier-I capital and formalized a detailed and
comprehensive plan for managing the group's capital. The aim of the plan is
to achieve, by year-end 2011, a Core Tier-1 Capital Ratio of 7.5%-8% and a
Total Capital Ratio of 13%.

At the beginning of 2010, the Bank embarked on a comprehensive
process of structural and personnel changes. As part of the process, most of
which will be completed during 2011, the Chairman of the Board and President
& CEO were replaced and new appointments were made to the positions of Head
of the Banking Division, Head of the Corporate Banking Division, and
President & CEO of IDB New York. In addition, extensive changes took place in
ICC's management and a risk management organization was established. In the
coming months, the establishment of the Strategy, Marketing and Service
Division will be completed, a Customers' Assets Division will be created and
the new service structures will be implemented in the business divisions.

During 2010, the initial stages of the group strategic plan got underway.
As part of this process goals and guidelines have been
established for the group strategy and the core principles of the plan have
been approved. These principles include effective management of the group's
capital, cost-savings by means of striving for a comprehensive and durable
solution in the field of labor relations, improved processes in IT and
operations, increasing profitability by expanding the product offering to
our customers, and the development of business activities with lower capital
requirements, or where the bank has a lower market share, relative to the
sector.

We are currently in the process of making a comprehensive
change to Discount's business focus. During 2011, the group expects to
complete the structural changes that were begun in 2010 and to present a
comprehensive and updated strategic plan. We are appropriately organized to
address all of the issues, working in cooperation with the group's employees
and managers. We have no doubt that we will execute these changes, and return
to the path of continuous improvement in our efficiency ratios, profitability
and return on equity, as well as improving service to our customers, and
providing value to our shareholders.

Data Regarding Subsidiaries

    2010
                                                      Return on     Capital
                                             Net   Shareholders'   Adequacy
                                          Income         Equity       Ratio
    Discount Bancorp Inc.               USD 51 M            6.8%      *14.7%
    Mercantile Discount Bank           NIS 147 M            8.2%       13.6%
    Discount Mortgage Bank              NIS 30 M            2.8%       18.3%
    Israel Credit Cards (ICC)
    (the Bank holds
    71.83% of the equity)              NIS 215 M           18.3%       16.2%

    2009
                                                      Return on     Capital
                                             Net   Shareholders'   Adequacy
                                          Income         Equity       Ratio
    Discount Bancorp Inc.               USD 44 M            6.6%      *14.9%
    Mercantile Discount Bank           NIS 180 M           11.1%       12.2%
    Discount Mortgage Bank              NIS 31 M            3.4%       18.8%
    Israel Credit Cards (ICC)
    (the Bank holds
    71.83% of the equity)              NIS 249 M           26.3%       13.7%

    * In conformity with mandatory rules in the U.S.A.

    Discount Group - Principal Data from the Financial Statements

    Income and Profitability (in NIS millions)
                                        Annual             Quarterly
                                                     %                    %
                                    2010  2009  change   2010  2009  change
    Income from financing
    activities before
    provision for doubtful debts    4,830 4,757    1.5    873 1,222   (28.6)
    Provision for doubtful debts      821   998  (17.7)   366   269    36.0
    Operating and other income      2,661 3,091  (13.9)   745   802    (7.1)
    Operating and other expenses    5,631 5,486   (2.6) 1,468 1,476    (0.5)
    Net operating income              688   943  (27.0)   130   156   (12.3)
    Net income for the period         724   923  (21.6)   135   154   (12.3)

    Return on net operating income
    in %                              7.6  11.8           5.5   7.4
    Return on net income in %         6.9   9.8           5.1   6.3

    Development of Assets and Liabilities (in NIS millions)

                                 December 31 December 31       %
                                        2010        2009  change
    Total assets                       185.8       187.8    (1.1)
    Credit granted to the public       118.7       114.4     3.7
    Deposits from the public           138.0       141.8    (2.7)
    Securitiesd                         37.2        36.3     2.3
    Shareholders' equity                11.2        10.0    12.5

    Principal Financial Ratios (in percentages)
                                                  December 31 December 31
                                                         2010        2009
    Financial resources in relation to total
    assets                                                6.2         5.5
    Credit granted to the public to deposits from
    the public                                           86.0        80.7
    Total capital to risk assets (capital
    adequacy ratio)                                     13.69       12.15
    Core capital to risk assets                           7.9         6.9
    Original Tier I capital to risk assets                8.0         7.1
    Provision for doubtful debts to credit
    granted to the public                                0.66        0.83
    Interest margin                                      1.48        1.41
    Operating expenses to total income
    (efficiency ratio)                                   75.2        69.9

Israel Discount Bank

Israel Discount Bank is a leading financial group in Israel.
With nationwide coverage, Israel Discount Bank provides a full spectrum of
corporate and retail financial products and services to its clients, both in
Israel and key financial centers around the world. Israel Discount Bank is
traded on the Tel-Aviv Stock Exchange under the ticker DSCT.

    For additional details please contact:
    Sarit Weiss
    Spokesperson
    Tel:    +972-3-5145516
    Mobile: +972-52-2461151
    E-mail: spokes@discountbank.net

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Sarit Weiss, Spokesperson, Tel: 972-3-5145516, Mobile: 972-52-2461151,
E-mail: spokes at discountbank.net