Israel Discount Bank Ltd.

Investor Presentation • Mar 13, 2023

Disclaimer:

This document has been prepared by Israel Discount Bank Ltd. (the "Bank") solely for use by the Bank in its presentation of its 2022 full year and 4 th 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 2021 full year and 4th 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.

Opening Remarks

Uri Levin, CEO

2022 – YEAR OF RECORD RESULTS

NII GROWTH

+33%

TOTAL EQUITY

25.5BN

CREDIT GROWTH

+13%

REACHED 2025 TARGETS THROUGH ACCELERATED EXECUTION & SUPPORTIVE MACRO

	Net Income	ROE	Efficiency Ratio
2014 WHERE WE STARTED(1)	505m	4.2%	87.1%
2019 WHERE WE WERE	1,702m	9.4%	65.2%
2022 WHERE WE ARE	3,495m	15.1%	55.8%
2025 TARGETS	3,500m	12.5%	55.0%

Source: Company filings.

5

Note: 2025 goals were set at the beginning of fiscal year 2021.

(1) In 2014 the Bank implemented its long-term strategic plan to improve its profitability and efficiency

SIGNS OF ECONOMIC SLOWDOWN, YET MACRO FUNDAMENTALS ARE STILL SOLID

6 Source: Latest Bank of Israel projections as of Jan 23

** forecast : as implied in IRS trades as of March 2 nd

Financial and Strategic Review

Barak Nardi, CFO

2022 HIGHLIGHTS

• Record profitability with net income of 3,495m and ROE of 15.1% in 2022, and net income of 939m and ROE of 15.4% in 4Q22, driven by increase in revenue from core banking activity.
• Strong positive impact of interest rate increase: In 2022 NII grew by 33% to 8,693 million. In 4Q22 NII grew by 51% compared with 4Q21 to 2,540 million, an increase of 11.4% from 3Q22.
• Operating efficiency materially improved to 55.8%, bringing us close to our strategic target of below 55%. In 4Q22 operating efficiency ratio reached 53.8%
• Continued focus on targeted segments: Mortgage balance grew by 21.1% YoY and medium enterprises balance grew by 16.6% YoY. Credit growth in 4Q22 slowed down, aligned with market conditions.
• Conservative management of credit portfolio: Credit Loss Expenses Ratio stood at 0.18% in 2022, and 0.38% in 4Q22, mainly to reflect the worsening in macro conditions.
• Dividend payout is 20% of 4Q22 net income: NIS 187 million, in line with dividend policy.

2 2 Q. 4	Net Income	ROE	Cost-Income Ratio 53.8% 3Q22: 55.2%; 4Q21: 71.2%	Credit Loss Expenses Ratio 2 2 0.38% 0 2 3Q22: 0.18% 4Q21: (0.02%)		Net income NIS 3,495m 2021: NIS 2,773m	ROE 15.1% 2021: 13.6%	Cost-Income Ratio 55.8% 2021: 65.4%	Credit Loss Expenses Ratio
	NIS 939 3Q22: NIS 893 m; 4Q21: NIS 529 m	15.4% 3Q22: 15.0%; 4Q21: 9.8%							0.18% 2021: (0.34%)
d e st u dj A	NIS 958 3Q22: NIS 884 m; 4Q21: NIS 674 m Adjusted for certain items presented in slide 27	15.7% 3Q22: 14.9%; 4Q21: 12.5%	53.0% 3Q22: 55.5%; 4Q21: 62.1%		d e st u dj A	NIS 3,190 2021: NIS 3,016m	13.8% 2021: 14.8%	57.4% 2021: 61.6%

RESPONSIBLE CREDIT GROWTH UNDER CHALLENGING MACRO CONDITIONS

GROWTH IN NET INTEREST INCOME AND IN FEES HIGHLIGHTS OUR CORE BUSINESS STRENGTH

* As calculated ** Net yield on interest bearing assets

10 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

COST INCOME RATIO IS IMPROVING DUE TO SUBSTANTIAL POSITIVE JAWS

11 * Jaws: Difference between revenues growth and expenses growth in the same period

CREDIT PROVISION REFLECTS ROBUSTNESS OF OUR PORTFOLIO & MACRO POTENTIAL IMPACT

ASSET QUALITY REMAINS STRONG WITH APPROPRIATE COVERAGE

NPL/Total Credit** remain relatively low NPLs Are Well Covered by Loan Loss Provision***

13 * 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.. ***NPL coverage: percent of loan loss provision from non accrual and 90 days and above past due credit.

CAL SEPARATION IS EXPECTED TO HAVE LIMITED IMPACT ON DISCOUNT ONGOING PROFITABILITY

• Record high results for CAL in 2022 Net profit of 309 NIS million, ROE of14.3% and Credit growth of 13%
• In light of strong results for Discount Group, CAL attributes only 5.4% to the consolidated net profit
• The future separation is expected to have a minor effect over net profit and ROE and a significant attribute to the Efficiency Ratio

2022 Group Results	With CAL	w/o CAL *
Net Income; NIS bn.	3,495	3,305
ROE	15.1%	14.8%
Efficiency Ratio	55.8%	51.5%
Credit loss expenses ratio	0.18%	0.14%

* (1) The data for ICC has been totally eliminated, with no calculation in respect of the alternative use of the risk assets that would become available as a result of the separation as well as the yield produced by them and with no calculation of the gains produced by the realization of the holdings in ICC and the yield produced by the investment thereof in an alternative activity. (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.

DRIVING VALUE THROUGH OUR AMBITIOUS STRATEGIC PLAN

ULTIMATE GOAL:

TO BE THE BEST FINANCIAL INSTITUTION FOR ITS CUSTOMERS, DELIVERING SUPERIOR VALUE FOR SHAREHOLDERS, OVER TIME

Key Strategic Pillars

Focus on increasing the Group's competitiveness, market share and profitability

Groundbreaking Innovation

1 2 3

Establish new non-bank initiatives through collaboration with third party partners and Fintech companies

Maximize the underlying, standalone value of our subsidiaries, leverage synergies and increase the Group's economic value

Maximizing Group Value

Traditional Banking

1

DRIVING PROFITABILITY & WINNING SHARE THROUGH ACCELERATED EXECUTION

Expanding credit focusing on

Mortgages & Middle Markets

Credit Growth	2022 YoY	3 Year CAGR
Total Credit	13.0%	10.1%
Mortgages	21.0%	20.6%
Medium Ent.	16.6%	10.9%

Improving efficiency through higher productivity

	2020	2021	2022
Efficiency Ratio (%)	67.5%	65.4%	55.8%
Income per Employee, NIS m	1.164	1.312	1.535

Proactively acquiring new customers and increasing customer base

Customer acquisition through "switch with a click"

1.9X Net positive customer acquisition ratio (2022)

Achieving first place in customer NPS continuous focusing on client needs

Net Performance Score NPS*	2020	2022
Discount NPS / Rank**	2% / 2	7% / 1
Peers average NPS	-9%	-6%
* Double blind survey by ipanel, Nov 2022	**Among the 5 leading banks

GENERATING VALUE THROUGH DISRUPTIVE INNOVATION

Two years after PayBox spinout, Discount is launching greenlend, A FinTech company that offers digital credit facilities to clients of all banks

The key principals behind our disruptive initiatives

• Separate and independent company
• Collaborating with partners that have an entrepreneurial DNA
• Full mandate to compete all banks (incl. Discount)
• Focusing on substantial value creation

• Large and fast growing customer base reaching 1.27 million active accounts at the end of 2022 and a turnover of over 5B NIS
• Substantial competitive advantage being the only local E-wallet with balance storing abilities
• On a mission to become Israel's leading wallet for "Managing money outside the Bank"
• Strong support of stakeholder Israel Discount bank and Shufersal Ltd.

Discount (70%) and ezbob (30%) are founding greenlend, a finTech company for fast emedded 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 guarnteed by Discount

DELIVERING OUTSTANDING PERFORMANCE ACROSS OUR SUBSIDIARIES

Maximizing Group Value

3

TO SUMMARIZE

We delivered record 2022 results, with net income of 3.5BN NIS, ROE of 15.1% and Cost Income of 55.8%, and we reached our 2025 strategic targets.

Substantial revenue increase from core banking activity – NII is growing by 33% in 2022, 51% in 4Q22 driven by credit growth & interest rate increase

Responsible credit growth - 13% YoY, 1.8% QoQ – even given the challenging macro conditions

Generating value through disruptive innovation - Discount is launching greenlend, a customized digital FinTech credit solution.

Future separation of CAL is expected to have a limited impact on Discount's ongoing profitability – minor negative impact on net profit & ROE, substantial positive impact on CIR.

Q&A

Barak Nardi, CFO Yossi Beressi, Chief Accountant

APPENDICES

ISRAEL DISCOUNT BANK: P&L AND SELECTED RATIOS

NIS m	4Q22	3Q22	4Q21	vs.3Q22	vs.4Q21
						2022	2021
Net interest income	2,540	2,280	1,683	11.4%	50.9%	8,693	6,529
Credit loss expenses (expenses release)	230	106	)10(	117.0%		407	)693(
Non-interest financing income	248	151	180	64.2%	37.8%	417	765
Commissions	857	871	809	)1.6%(	5.9%	3,404	3,125
Other income	9	5	50	80.0%	)82.0%(	430	72
Total non-interest income	1,114	1,027	1,039	8.5%	7.2%	4,251	3,962
Total income	3,654	3,307	2,722	10.5%	34.2%	12,944	10,491
Salaries and related expenses	988	881	970	12.1%	1.9%	3,568	3,468
Maintenance & depreciation	313	309	293	1.3%	6.8%	1,232	1,187
Other expenses	666	637	676	4.6%	)1.5%(	2,417	2,203
Total operating and other expenses	1,967	1,827	1,939	7.7%	1.4%	7,217	6,858
Income before taxes	1,457	1,374	793	6.0%	83.7%	4,326	5,320
Provision for taxes on income	516	472	269	9.3%	91.8%	1,516	1,806
Income after taxes	941	902	524	4.3%	79.6%	3,514	2,810
Net income attributable to shareholders	939	893	529	5.2%	77.5%	3,495	2,773
ROE	15.4	15.0%	9.8%			15.1%	13.6%
Cost income ratio	53.8	55.2%	71.2%			55.8%	65.4%
CET-1 ratio	10.25	10.17%	10.14%			10.25%	10.14%
NIM	2.98%	2.74%	2.30%			2.69%	2.34%
Rate of credit loss expenses	0.38%	0.18%	)0.02%(			0.18%	)0.34%(
NPL ratio	0.64%	0.67%	0.59%
Dividend per share (in Agurot)*	15.18	14.43	9.08

* Dividend in respect of the relevant period

ISRAEL DISCOUNT BANK: SELECTED BALANCE SHEET ITEMS

NIS m	31.12.22	30.09.22	31.12.21
Cash and deposits with banks	65,713	71,510	59,638
Credit to the public	244,288	240,032	216,196
Provision for credit losses	(3,209)	(3,151)	(3,040)
Credit to the public, net	241,079	236,881	213,156
Credit to governments	2,599	2,574	2,664
Investment in investee companies	486	502	462
Buildings and equipment	3,904	3,724	3,401
Intangible assets and goodwill	162	163	163
Assets in respect of derivative instruments	11,420	13,601	5,522
Other assets	5,740	6,215	5,006
Total Assets	376,754	379,074	335,088
Deposits from the public	292,293	290,646	260,907
Deposits from banks and governments	15,493	16,839	12,880
Securities borrowed or sold via repo agreements*	3,739	3,038
Bonds and subordinated debt notes	12,308	13,491	15,071
Liabilities in respect of derivative instruments	9,348	11,718	6,323
Other liabilities	18,095	18,624	17,759
Total liabilities	351,276	354,356	312,940
Equity capital attributed to the Bank's shareholders	24,880	24,112	21,483
Non-controlling rights in consolidated companies	598	606	665
Total equity	25,478	24,718	22,148
Total Liabilities and Equity	376,754	379,074	335,088

ISRAEL DISCOUNT BANK: Adjustment to P&L

	year ended at 31 December NIS m
NIS m	2022	2021	2020
Income from the sale of Visa Inc. shares	)20(		)44(
Realization of Assets	)315(	)38(
Provisions for salary agreement		155
Early retirement in a subsidiary			15
Early redemption of long term benefits		19
Effect of settlment	30	94	272
Cost associated with IDBNY change of headquarters location		13	26
Legal provision, net of insurance payment			43
Total	)305(	243	312

MERCANTILE: FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	4Q22	3Q22	4Q21	Vs. 3Q22	Vs. 4Q21	2022	2021	change
Net interest income	521	452	342	15.3%	52.3%	1,746	1,324	31.9%
Non-interest income	97	101	94	(4.0%)	3.2%	376	469	(19.8%)
Total income	618	553	436	11.8%	41.7%	2,122	1,793	18.3%
Operating & other expenses	310	253	309	22.5%	0.3%	1,051	1,021	2.9%
Net income	151	185	91	(18.4%)	65.9%	601	562	6.9%
Return on equity	15.10%	19.3%	9.80%			15.7	16.2
Cost-income ratio	50.2%	45.8%	70.9%			49.5%	56.9%
Rate of credit loss expenses	0.73%	0.25%	(0.06%)			0.38%	(0.2%)
NIM	3.39%	2.90%	2.57%			2.92	2.63%
Total assets	64,786	65,485	59,894	(1.1%)	8.2%
Credit to the public, net	42,569	42,325	37,636	0.6%	13.1%
Securities	6,988	6,911	6,883	1.1%	1.5%
Deposits from the public	51,047	51,507	48,070	(0.9%)	6.2%
Total equity	4,055	3,928	3,771	3.2%	7.5%

IDBBANK: FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

USD m	4Q22	3Q22	4Q21	Vs. 3Q22	Vs. 4Q21	2022	2021	change
Net Interest Income	92	92	71	0.2%	29.9%	335	257	30.4%
Non-Interest Income	12	17	22	(29.4%)	(45.5%)	67	87	(23.0%)
Total Income	104	109	93	(4.6%)	11.8%	402	344	16.9%
Operating & Other Expenses	64	71	54	(9.9%)	18.5%	255	222	14.9%
Net Income	32	25	30	28.0%	6.7%	114	92	23.9%
Return on Equity	11.50%	8.9%	10.4%	29.2%	10.6%	10.3%	7.9%	30.4%
Cost-Income Ratio	61.50%	65.1%	58.1%	(5.5%)	5.9%	63.4%	64.7%	(2.0%)
Credit Loss Expenses ratio (Expenses Release)	0.06%	0.2%	(0.2%)	(73.9%)	(130.0%)	(0.0%)	(0.1%)	(40.0%)
NIM	3.16%	3.1%	2.4%	1.9%	31.7%	2.8%	2.3%	21.7%
Total Assets	12,512	12,369	12,952	1.2%	(3.4%)	12,512	12,952	(3.4%)
Loans, net	8,154	8,455	8,421	(3.6%)	(3.2%)	8,154	8,421	(3.2%)
Securities	2,460	2,571	2,829	(4.3%)	(13.0%)	2,460	2,829	(13.0%)
Deposits from the Public	10,479	10,462	11,245	0.2%	(6.8%)	10,479	11,245	(6.8%)
Total Equity	1,121	1,081	1,158	3.7%	(3.2%)	1,121	1,158	(3.2%)

CAL: FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	4Q22	3Q22	4Q21	Vs. 3Q22	Vs. 4Q21	2022	2021
Income From Credit Card Transactions	428	434	388	(1.4%)	10.3%	1,651	1,432
Credit Loss Expenses (Expenses Release)	43	28	9	53.6%	377.8%	97	(9)
Non-Interest Financing Income	(7)	61	1			102	5
Total Income	599	665	535	(9.9%)	12.0%	2,433	1,985
Total Expenses (excluding credit loss expenses)	498	482	462	3.3%	7.8%	1895	1603
Net income	39	109	40	(64.2%)	(2.5%)	309	271
Return on equity	7.4	20.9%	7.5%			14.3%	13.2%
Cost-income ratio	83.1%	72.5%	86.4%			77.9%	80.8%
Total assets	18,547	18,564	16,076			18,547	16,076
Interest bearing credit	8,183	7,832	6,717			8,183	6,717
Total equity	2,120	2,091	2,216			2,120	2,216