Israel Discount Bank Earns NIS 288 Million in Q3 2010

By Israel Discount Bank Ltd, PRNE
Sunday, November 28, 2010

TEL AVIV, Israel, November 29, 2010 -

    - Return on Shareholders' Equity in Q3/10 is 11.3%

    - Third Quarter Net Income Increases 82.3% Over Q2/10, From NIS158
      Million to NIS288 Million and Decreases 1.4%, Compared With NIS 292
      Million in Third Quarter 2009

    - Return on Shareholders' Equity 11.3% Compared With 12.7% in 2009

Israel Discount Bank Limited (TASE:DSCT), one of Israel's leading banks,
today announced its financial results for the third quarter of 2010.
Additional key results include:

    - Third Quarter Net Income - Increases by 82.3 % to NIS 288 million,
      compared with NIS 158 million in the second quarter of 2010 and
      decreases by 1.4%, compared with NIS 292 million in the corresponding
      quarter last year.

    - Third Quarter Return on Shareholders' Equity - 11.3% on an annual
      basis, compared with 6.3% in the second quarter of 2010 and compared
      with 12.7% in the corresponding quarter last year.

    - First Nine Months of 2010 Net Income - NIS 589 million, compared with
      NIS 769 million in the corresponding period last year, a decrease of
      23.4%.

    - First Nine Months of 2010 Return on Shareholders' Equity - 7.7% on an
      annual basis, compared with 11.3% in the corresponding period last year
      and 9.8% for the whole of 2009.

    - Ratio of capital to risk assets at September 30, 2010:

                        Basel II  Basel I

    Total capital ratio    12.93    13.54
    Tier I capital          8.01     9.00
    ratio
    Core capital ratio      7.37        -

(Logo:
www.newscom.com/cgi-bin/prnh/20100810/403645 )

Commenting on the results, President & CEO, Giora Offer,
noted, "The Net Income for the third quarter and the first nine months of
2010 totals NIS 288 million and NIS 589 million, respectively, and the return
on shareholders' equity is 11.3% and 7.7%, respectively. The shareholders'
equity of the Bank amounts to NIS 10.8 billion and its capital adequacy ratio
is 12.93%.

The results announced today reflect the Group's achievements
in the various fields of its business activity: building strong capital
adequacy without forsaking growth, increasing income, reducing provisions for
doubtful debts and continuing to improve the credit portfolio. All these have
been attained while keeping expenses under control, an expression of the
efficiency measures implemented in recent years. The sale of the Bank's
shares by the State and the offering expected in the coming weeks are
significant events for all the Bank's stakeholders.

The pace at which new customers are being attracted continues
to be a source of satisfaction and the positive effects thereof are
noticeable in every item in the financial statements. "Discount Key", which
we launched in May this year, continues to be the central marketing platform,
with more than 250,000 having joined the various savings programs.

In accordance with the board's instructions, the Bank's
management is focusing on the strategy plan for 2011-2015, whose main
emphasis lies on Group synergy, efficiency and further growth and development
of core businesses.

The financial statements as at September 30, 2010 are the last
financial statements that I shall be presenting in my role as President & CEO
of the Group and I would like to again thank the members of the Board of
Directors, management and, in particular, all the employees of the Bank and
the Group for ten wonderful years during which the Bank has established its
position, and become a leading, competitive bank known for its dedication
toward its customers.

I wish all the best to my successor "Mr. Reuven Spiegel, who will take
over the position at the end of the year, and who I am sure will lead the
Bank to new and even higher performance levels."

Main factors affecting the Group's profits for the first nine
months of 2010, compared with the corresponding period last year:

    - A decrease of 25.0% in the provision for doubtful debts.

    - An increase of 0.4% in income from financing activities
      before provision for doubtful debts.

    - A decrease of 15.0% in operating and other income that was
      affected by a NIS 169 million reduction in other income, mainly from
      profits recognized on the severance pay fund, and also from a 3.9%
      reduction in operating commissions, arising primarily from the decrease
      in income from credit cards.

    - A decrease of 58.0% in the Bank's share in the operating
      income of affiliated companies, from NIS 236 million in the first nine
      months of 2009 (including NIS 130 million with respect to the reversal
      of a provision for taxes on the investment in The First International
      Bank of Israel) to NIS 99 million in the first nine months of 2010.

    - An increase of 1.5% in operating and other expenses, due
      mainly to higher depreciation expenses.

Main developments in assets and liabilities of the Discount Group
in the first nine months of 2010

    - Total assets decreased by 0.4% to NIS 187.0 billion,
      compared with NIS 187.8 billion at December 31, 2009.

    - Credit granted to the public increased by 4.1% to NIS 119.1
      billion, compared with NIS 114.4 billion at December 31, 2009.

    - Deposits from the public decreased by 2.8% to NIS 137.8
      billion, compared with NIS 141.8 billion at December 31, 2009.

    - Shareholders' equity increased by 7.7% to NIS 10.8 billion,
      compared with NIS 10.0 billion at December 31, 2009.

    Data Regarding Subsidiaries

    First Nine Months of 2010
                                                          Return on  Capital
                                                  Net Shareholders' Adequacy
                                               income        Equity    Ratio
    Discount Bancorp Inc.                    USD 42 M          7.7%  **14.6%
    Mercantile Discount Bank                NIS 121 M          9.3%   *13.1%
    Discount Mortgage Bank                 NIS 24.2 M          2.9%   *18.3%
    Israel Credit Cards ICC (the
    Bank holds 71.83% of the equity)        NIS 176 M         20.9%   *16.9%

    * Computed according to Basel II guidelines.
    ** In accordance with the obligatory US guidelines.

    First Nine Months of 2009

                                                          Return on  Capital
                                                  Net Shareholders' Adequacy
                                               income        Equity    Ratio
    Discount Bancorp Inc.                    USD 29 M          6.1%  **13.5%
    Mercantile Discount Bank                NIS 158 M         13.5%   *12.9%
    Discount Mortgage Bank                 NIS 25.6 M          3.8%   *10.4%
    Israel Credit Cards ICC (the
    Bank holds 71.83% of the equity)         IS 199 M         30.6%   *21.5%

    * Computed according to Basel I guidelines.
    ** In accordance with the obligatory US guidelines.

    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%

    * Computed according to Basel II guidelines.
    ** In accordance with the obligatory US guidelines.

    Discount Group - Principal Data from the Financial Statements

    Income and Profitability (in NIS millions)

                     Third Quarter            First Nine Months        Annual
                                                      Sept.
                                        %    Sept.                 %
                   2010     2009   change     2010     2009   change     2009
    Income from
    financing
    activities
    before
    provision
    for
    doubtful
    debts         1,331    1,326      0.4    3,537    3,522      0.4    4,757
    Provision
    for
    doubtful
    debts           169      246    [31.3]     547      729    [25.0]     998
    Operating
    and other
    income          659      814    [19.0]   1,957    2,302    [15.0]   3,091
    Operating
    and other
    expenses      1,316    1,375     [4.3]   4,071    4,010      1.5    5,486
    Operating
    income
    before
    taxes           505      519     [2.7]     876    1,085    [19.3]   1,364
    Operating
    income
    after taxes     275      267      2.2      516      608    [15.1]     857
    Net income      288      292     [1.4]     589      769    [23.4]     923
    Return on
    net income
    in %           11.3     12.7               7.7     11.3               9.8

    Development of Assets and Liabilities (in NIS billions)

                                    September 30       December 31
                                                  %               %
                                  2010  2009 change     2009 change
    Total Assets                 187.0 187.2   [0.1]   187.8   [0.4]
    Credit granted to the public 119.1 115.5    3.1    114.4    4.1
    Securities                    39.6  35.9   10.4     36.3    9.0
    Deposits from the public     137.8 140.4   [1.8]   141.8   [2.8]
    Shareholders' equity          10.8  10.0    7.8     10.0    7.7

    Principal Financial Ratios (in percentages)

                                               September 30      December 31
                                                 2010   2009            2009
    Financial resources in relation to total      5.9    5.5             5.5
    assets
    Credit granted to the public to deposits     86.4   82.3            80.7
    from the public
    Total capital to risk components (capital   12.93      -           12.15
    adequacy ratio)*
    Total capital to risk components (capital   13.54  12.95           13.22
    adequacy ratio)**
    Tier I capital to risk components            8.01      -            7.57
    Provision for doubtful debts to credit       0.58   0.80            0.83
    granted to the public
    Interest margin                              1.40   1.36            1.39
    Operating expenses to total income           74.1   68.9            69.9
    (efficiency ratio)

    * Computed according to Basel II guidelines.
    ** Computed according to Basel I guidelines.

About Israel Discount Bank

Israel Discount Bank is a leading financial group in Israel. With
nationwide coverage, and a fast-growing domestic franchise, 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 a member of and is traded on the Tel-Aviv
Stock Exchange under the Ticker DSCT; Bloomberg: DSCT.IT Reuters: DSCT.TA

The above constitutes an English convenience translation of the Hebrew
Press Release issued by the Bank

It is hereby emphasized that no representation or warranty whatsoever is
given as to the achievement or fulfillment of any forecasts regarding the
future prospects of the Bank. The actual performance of the Bank may vary
materially from any forecasts provided, due, among others, to changes in
macro economic conditions, changes in capital markets, regulatory and other
changes not within the control of the Bank. Such changes may contribute to
certain risks and uncertainties regarding and predictions and or forecasts
provided by the Bank, and which could lead to material differences between
actual performance of the Bank and any forecasts provided. Forward-looking
information is generally typified by terms such as "believe", "anticipate",
"expect", "intend", "project" "forecast" and or similar expressions.

For further details, please refer to the "Forward Looking Information"
section in the Bank's financial statements.

For additional information, please visit the Company's investor relations
website at www.discountbank.co.il/IR

    Company Contact

    Barry Simon
    Investor Relations
    Tel: +972-3-5146593
    barry.simon@discountbank.co.il

Photo:
www.newscom.com/cgi-bin/prnh/20100810/403645

Company Contact: Barry Simon, Investor Relations, Tel: +972-3-5146593, barry.simon at discountbank.co.il

YOUR VIEW POINT
NAME : (REQUIRED)
MAIL : (REQUIRED)
will not be displayed
WEBSITE : (OPTIONAL)
YOUR
COMMENT :