Israel Discount Bank Ltd.

Investor Presentation • Aug 14, 2023

Investor Relations

August 14, 2023

Disclaimer Disclaimer: This document has been prepared by Israel Discount Bank Ltd. (the "Bank") solely for use by the Bank in its presentation of its 2 nd quarter report, as well as in strategic updates referred to in the Bank's reports. This presentation is not a substitute for the Bank's 2023 2 nd quarter financial statements which include the full financial information including forward-looking Information. The English version of the financial statements are available on the Bank's investor relations website at www.investors.discountbank.co.il

This presentation includes forward-looking information, as defined in the Israeli Securities Law, 5728 - 1968. Such information includes, among other things, projections, objectives, estimates and assessments of the Bank, which relate to future events or issues, the occurrence of which is not certain and is outside the control of the Bank. Forward-looking information does not constitute proven, factual information, and is based solely on the viewpoint of the Bank's management, which is based, among other things, on analysis of general information that is known to the Bank's management as of the date of this presentation. Forward-looking information, by definition, is subject to the substantial risk of not coming to fruition, and such information is not definite and cannot be estimated in advance and is at times even beyond the Bank's control. The fulfillment of forward-looking information is impacted by risk factors that are characteristic of the Bank's activities and also by developments in the general environment and external factors that affect the Bank's operations, which cannot be estimated in advance and that by their nature are beyond the control of the Bank. Therefore, readers of this presentation are hereby warned that the results and achievements of the Bank in the future may be significantly different than those presented in the forward-looking information included in this presentation. Similarly, forward-looking projections and estimations are based on assumptions and information in the possession of the Bank as of the time of the presentation, and the Bank shall not be required to update or revise any such projection or estimation in order to reflect events or conditions that transpire after the date of the presentation.

Disclaimer regarding unsponsored American Depository Receipt (ADR):

U.S. depository institutions or banks may establish ADR programs in respect of the shares of certain non-U.S. issuers without the consent or participation of such issuers (the so called "Unsponsored ADRs"(. An ADR or American Depositary Receipt, which is issued by a U.S. bank or depository to evidence a share of a non-U.S. issuer that has been deposited with the U.S. bank or depository. An Unsponsored ADR program is set up without the cooperation of the non-U.S. issuer or even without its consent. Israel Discount Bank does not support or encourage the creation of Unsponsored ADR programs in respect of its securities and, in any event, disclaims any liability in connection with an Unsponsored ADR.

Israel Discount Bank makes no representation regarding its compliance with Rule 12g3-2(b) of the U.S. Securities Exchange Act of 1934, as amended.

AGENDA Opening Remarks and Financial Review

Barak Nardi, CFO

2Q 2023 – ANOTHER QUARTER OF RECORD RESULTS

DIVIDEND PAYOUT / DIVIDEND POLICY

30% / 40% 7.1% / 41.5% NII GROWTH QoQ / YoY

CREDIT GROWTH 1.6% / 9.0% QoQ / YoY

Macro SIGNS OF ECONOMIC SLOWDOWN, YET MACRO FUNDAMENTALS ARE STILL SOLID

5

Financial Highlights 2Q23 AND 1H23 HIGHLIGHTS

• Strong profitability with net income of NIS 1,187m and ROE of 18.0% in 2Q23, driven by increase in revenue from core banking activity.
• Positive impact of interest rate increase: NII grew in 2Q23 by 7.1% compared with 1Q23 and by 41.5% compared with 2Q22. Net Interest Margin (NIM) improved to 3.33% compared with 3.18% in 1Q23 and 2.63% in 2Q22.
• Operating efficiency maintained at 47.5%, compared with 46.1% in 1Q23 and 59.2% in 2Q22
• Moderate credit growth in line with market conditions: Total credit grew by 1.6% in 2Q23 with corporates growing by 2.6%, medium enterprises growing by 3.8%, and mortgage balance growing by 1.5%.
• Higher provisions & NPL: As expected, credit loss expenses ratio mounted to 0.49% driven by increase in specific & group provisioning. Non Performing Loans (NPL) out of total credit increased to 0.89%, compared with 0.63% in 1Q23 and 0.81% in 2Q22.
• Dividend policy increases to 40% of net income: Actual dividend payout of 30% in 2Q23 (NIS 356 million) in line with dividend policy.

3	Net Income	ROE	Cost-Income Ratio	Credit Loss Expenses Ratio	3 2	Net income	ROE	Cost-Income Ratio	Credit Loss Expenses Ratio
2 Q 2	NIS 1,187m 1Q23: NIS 1,269 m; 2Q22: NIS 680 m	18.0% 1Q23: 20.1%; 2Q22: 11.8%	47.5% 1Q23: 46.1%; 2Q22: 59.2%	0.49% 1Q23: 0.33% 2Q22: 0.23%	H 1	NIS 2,456m 1H22: NIS 1,663 m	19.0% 1H22: 14.9%	46.8% 1H22: 57.2%	0.41% 1H22: 0.06%
d e st u dj A	NIS 1,187m ; 1Q23: NIS 1,201 m;	18.0% 1Q23: 19.0%;	47.5% 1Q23: 48.1%;		d e st u dj A	NIS 2,388 1H22: NIS 1,348 m	18.5% 1H22: 12.1%	47.8% 1H22: 61.4%

Credit portfolio RESPONSIBLE CREDIT GROWTH IN ACCORDANCE WITH MARKET DEMAND

Income and expense slide CONTINUED GROWTH IN NII & IN NIM HIGHLIGHTS OUR CORE BUSINESS STRENGTH

* As calculated ** Net yield on interest bearing assets

8

Financing Income from current operations is total net financing income excluding various items, such as CPI effect, net profit from realization and fair value adjustments, profit or loss from investments in shares, exchange rates differences, net profit on the sale of loans

Income and expense slide KEEPING COST INCOME RATIO LOW AND MAINTAINING POSITIVE JAWS

Asset quality CREDIT LOSS EXPENSES ARE GROWING IN LINE WITH MARKET CONDITIONS

Specific Provision is growing, but Group Basis Provision drives most of the overall Credit Loss Expenses (in NIS m and %)

10

Ample allowance for Loan Loss Provisions from Total Credit*

NPL/Total Credit** Ratio rises amid challenging Macroeconomic Environment

* Calculated as percent of Loan Loss Provisions from total credit.

** NPL: percent of non accrual and 90 days and above past due from gross total credit.

Asset quality SOLID AND DIVERSIFIED FUNDING BASE AND AMPLE LIQUIDITY

56,095

STRONG PERFORMANCE ACROSS OUR SUBSIDIARIES

(2) In congruence of that stated above, the capital has been standardized so as to maintain the actually existing capital adequacy level, and accordingly, the return on equity has been standardized.

DIVIDEND POLICY RAISED TO 40% IN LINE WITH OUR HIGH PROFITABILITY; ACTUAL PAYOUT IS 30%

Green Lend Financial Highlights DISCOUNT GROUP SETTLES INTO ITS NEW CAMPUS OUTSIDE OF TEL-AVIV

• An advanced 150,000sqm green-standard working space facility.
• Assembling all Head Office units of Discount & Mercantile in a joint campus.
• Moving from 18 separate sites to a single new building.
• Supports new way of work that will enable organizational culture transition.
• Following the regulatory decision to divest CAL, Discount acquires CAL's share of the campus.

Financial Highlights CONTINUE OUR JOURNEY OF Green Lend GROUND BREAKING INNOVATION

• March 2023 – Discount (70%) and ezbob (30%) announced the foundation of greenlend, a fintech company for fast embedded digital credit solutions, that will offer credit to clients of all banks
  • ✓ Fully digital, based on top tier international platform
  • ✓ Distributed via 3 rd party channels, offering embedded finance solutions. Capital guaranteed by Discount
• August 2023 – The bank received the BoI approval to control and hold greenlend in partnership with ezbob

TO SUMMARIZE

We delivered yet again strong results for 2Q23, with net income of 1.19BN NIS, and ROE of 18.0%.

Substantial revenue increase from core banking activity – NII is growing by 7.1% QoQ, and by 41.5% YoY. Net Interest Margin (NIM) reached 3.33% compared with 3.18% in 1Q23 and 2.98% in 2Q22.

Maintaining low Cost Income Ratio at 47.5%, compared with 46.1% in 1Q23 and 59.2% in 2Q22.

Responsible credit growth, with asset quality remaining solid – Credit growth of 1.6%, in line with market conditions. Increase in credit loss expenses reflects higher risk, in line with market conditions.

Dividend Policy raised to 40%, as we continue our long-term journey to increase value for our shareholders; Actual Payout remains at 30%.

AGENDA Agenda 2

Q&A

Barak Nardi, CFO Yossi Beressi, Chief Accountant

APPENDICES

Appendix section slide

ISRAEL DISCOUNT BANK: ADJUSTED P&L & SELECTED RATIOS

NIS m	2Q23	1Q23	2Q22	vs.1Q23	vs.2Q22	1H23	1H22	change
Net interest income	2,934	2,740	2,073	7.1%	41.5%	5,674	3,873	46.5%
Credit loss expenses	312	204	131	52.9%	138.2%	516	71	626.8%
Non-interest financing income	282	329	)27(	)14.3%(	N/A	611	18	N/A
Commissions	869	887	851	)2.0%(	2.1%	1,756	1,676	4.8%
Other income	0	301	0	N/A	N/A	301	416	)27.6%(
Total non-interest income	1,151	1,517	824	)24.1%(	39.7%	2,668	2,110	26.4%
Total income	4,085	4,257	2,897	)4.0%(	41.0%	8,342	5,983	39.4%
Salaries and related expenses	954	945	844	1.0%	13.0%	1,899	1,669	13.8%
Maintenance & depreciation	326	324	307	0.6%	6.2%	650	610	6.6%
Other expenses	659	693	565	)4.9%(	16.6%	1,352	1,114	21.4%
Total operating and other expenses	1,939	1,962	1,716	)1.2%(	13.0%	3,901	3,423	14.0%
Income before taxes	1,834	2,091	1,050	)12.3%(	74.7%	3,925	2,489	57.7%
Provision for taxes on income	626	763	371	)18.0%(	68.7%	1,389	818	69.8%
Income after taxes	1,208	1,328	679	)9.0%(	77.9%	2,536	1,671	51.8%
Net income attributable to shareholders	1,187	1,269	680	)6.5%(	74.6%	2,456	1,663	47.7%
ROE	18.0%	20.1%	11.8%			19.0%	14.9%
Cost income ratio	47.5%	46.1%	59.2%			46.8%	57.2%
CET-1 ratio	10.35%	10.22%	10.16%			10.35%	10.16%
NIM	3.33%	3.18%	2.63%			3.25%	2.50%
Rate of credit loss expenses	0.49%	0.33%	0.23%			0.41%	0.06%
NPL ratio	0.89%	0.63%	0.81%			0.89%	0.81%
Dividend per share (in Agurot)*	28.79	30.78	10.99

* Dividend in respect of the relevant period

ISRAEL DISCOUNT BANK: SELECTED BALANCE SHEET ITEMS

NIS m	30.06.23	31.12.22	30.06.22
Cash and deposits with banks	56,696	65,713	63,449
Securities	54,537	44,794	43,926
Securities borrowed or purchased under agreements to resell	1,024	857	1,330
Credit to the public	256,768	244,288	235,510
Provision for credit losses	)3,571(	)3,209(	)3,045(
Credit to the public, net	253,197	241,079	232,465
Credit to governments	3,036	2,599	2,607
Investment in investee companies	483	486	493
Buildings and equipment	4,245	3,904	3,573
Intangible assets and goodwill	162	162	163
Assets in respect of derivative instruments	12,400	11,420	11,023
Other assets	6,035	5,740	5,392
Total Assets	391,815	376,754	364,421
Deposits from the public	292,656	292,293	283,423
Deposits from banks and governments	14,344	15,493	14,884
Securities borrowed or sold via repo agreements*	10,728	3,739	1,946
Bonds and subordinated debt notes	16,479	12,308	13,863
Liabilities in respect of derivative instruments	10,124	9,348	9,303
Other liabilities	19,802	18,095	16,909
Total liabilities	364,133	351,276	340,328
Equity capital attributed to the Bank's shareholders	27,016	24,880	23,490
Non-controlling rights in consolidated companies	666	598	603
Total equity	27,682	25,478	24,093
Total Liabilities and Equity	391,815	376,754	364,421

* Including securities borrowed or purchased under agreements to resell

ISRAEL DISCOUNT BANK: ADJUSTMENTS TO P&L

NIS m	2Q23	1Q23	2Q22
Reported net income	1,187	1,269	680
Realization of Assets	-	)142(	-
Cost associated with the separation of CAL	-	74	-
Total	-	)68(	-
Adjusted net income	1,187	1,201	680

MERCANTILE: FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	2Q23	1Q23	2Q22	Vs. 1Q23	Vs. 2Q22	1H23	1H22	Change
Net interest income	608	563	414	8.0%	46.9%	1,171	773	51.5%
Non-interest income	111	109	89	1.8%	24.7%	220	178	23.6%
Total income	719	672	503	7.0%	42.9%	1,391	951	46.3%
Operating & other expenses	266	255	247	4.3%	7.7%	521	488	6.8%
Net income	258	237	144	8.9%	79.2%	495	265	86.8%
Return on equity	23.7%	23.0%	15.5%			23.4%	14.2%
Cost-income ratio	37.0%	37.9%	49.1%			37.5%	51.3%
Rate of credit loss expenses	0.57%	0.50%	0.36%			0.52%	0.31%
NIM	3.91%	3.61%	2.86%			3.76%	2.68%
Total assets	63,137	64,417	63,081	)2.0%(	0.1%
Credit to the public, net	44,163	43,718	41,306	1.0%	6.9%
Securities	6,872	7,109	7,001	)3.3%(	)1.8%(
Deposits from the public	49,637	50,741	49,466	)2.2%(	0.3%
Total equity	4,531	4,262	3,777	6.3%	20.0%

1123	1H22	Change
1.171	773	51.5%
220	178	23.6%
1.391	951	46.3%
521	488	6.8%
495	265	86.8%
23 4%	14 2%
37.5%	51.3%
0.52%	0.31%
3.76%	2 68%

IDBBANK: FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

USD m	2Q23	1Q23	2Q22	Vs. 1Q23	Vs. 2Q22	1H23	1H22	Change
Net Interest Income	86	87	79	)1.1%(	9.1%	173	151	14.8%
Non-Interest Income	17	17	20	)2.9%(	)16.5%(	34	38	)10.8%(
Total Income	103	104	99	)1.4%(	3.8%	207	189	9.6%
Operating & Other Expenses	73	68	62	6.9%	17.7%	141	120	17.3%
Net Income	22	30	30	)25.7%(	)25.9%(	52	57	)9.5%(
Return on Equity	7.5%	10.5%	10.8%	)28.6%(	)30.6%(	9.0%	10.3%
Cost-Income Ratio	70.9%	65.4%	62.6%	8.4%	13.3%	68.1%	63.5%
Credit Loss Expenses ratio	0.10%	)0.18%(	)0.10%(	N/A	N/A	)0.04%(	)0.21%(
NIM	2.96%	3.03%	2.62%	)2.3%(	13.0%	2.99%	2.48%
Total Assets	12,224	12,830	12,604	)4.7%(	)3.0%(
Loans, net	7,982	8,086	8,608	)1.3%(	)7.3%(
Securities	2,705	2,679	2,607	1.0%	3.8%
Deposits from the Public	10,266	10,773	10,821	)4.7%(	)5.1%(
Total Equity	1,167	1,161	1,094	0.5%	6.7%

1 - 23	1 - 22	Change
173	151	14.8%
34	38	(10.8%)
207	189	9.6%
141	120	17.3%
52	57	(9.5%)
9.0%	10 3%
68.1%	63.5%
(0.04%)	(0.21%)
2 99%	2.48%

CAL: FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	2Q23	1Q23	2Q22	Vs. 1Q23	Vs. 2Q22	1H23	1H22	Change
Income From Credit Card Transactions	447	423	412	5.7%	8.5%	870	789	10.3%
Credit Loss Expense	53	41	27	29.3%	96.3%	94	26	261.5%
Non-Interest Financing Income	-	301	31	N/A	N/A	301	48	N/A
Total Income	650	918	615	)29.2%(	5.7%	1,568	1,169	34.1%
Total Expenses (excluding credit loss expenses)	483	542	475	)10.9%(	1.7%	1,025	915	12.0%
Net income - Adjusted	89	85	81	4.7%	9.9%	174	161	8.1%
Return on equity - Adjusted	16.7%	16.2%	14.6%			16.5%	14.4%
Cost-income ratio - Adjusted	74.3%	75.2%	77.2%			74.0%	78.3%
Total assets	19,633	19,435	17,698	1.0%	10.9%
Interest bearing credit	8,762	8,416	7,518	4.1%	16.5%
Consumer credit	7,549	7,216	6,414	4.6%	17.7%
Total equity	2,358	2,278	2,057	3.5%	14.6%

1 - 23	1 - 22	Change
870	789	10.3%
94	26	261.5%
301	48	N/A
1.568	1.169	34.1%
1.025	915	12.0%
174	161	8.1%
16.5%	14.4%
74.0%	78.3%