Israel Discount Bank Ltd.

Investor Presentation • May 23, 2022

1Q 22 REVIEW

FINANCIAL AND STRATEGIC HIGHLIGHTS

Investor Relations

May 23, 2022

Disclaimer:

This document has been prepared by Israel Discount Bank Ltd. (the "Bank") solely for use by the Bank in its presentation of its 1 st quarter 2022 report, as well as in strategic updates referred to in the Bank's reports. This presentation is not a substitute for the Bank's 1 st 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 and Financial Review

Barak Nardi, CFO

STRONG UNDERLYING SUSTAINABLE PERFORMANCE ACROSS KEY INDICATORS

Adjusted NIS 668m

Adjusted 12.4%

YoY CREDIT GROWTH	CET-1 RATIO	YoY MORTGAGE ORIGINATION GROWTH
12.1	10.55	77.0
%	%	%

EXPECTATION FOR RATE INCREASE CONTINUE; LONGER-TERM POSITIVE FOR PROFITABILITY

1Q 2022 HIGHLIGHTS

• Discount reported strong results with 983m in net profit and ROE of 18.3% supported by a strong underlying business and one-times associated from the sale of properties as we prepare to move to our new campus in early 2023. Adjusting for the sale of real estate properties net profit was NIS 668m and adjusted ROE was 12.4%.
• Solid execution at all subsidiaries driving a robust Group performance.
• Continued robust YTD growth in targeted segments of mortgages up 5.1% and medium enterprises up 12.9% (6.2% excluding the classification of corporate customers to medium).
• Strong Asset quality with negative LLP, low write-offs and 1.31% coverage ratio
• Raised Equity of NIS 1.4 billion driving CET-1 to 10.55% and facilitating future growth as we continue to focus on achieving long-term financial goals
• Dividend payout of NIS 196.6 m; 20% of 1Q 22 net income

2 2 Q 1	Net income	ROE	Cost-income ratio	Credit loss expenses ratio	Leverage Ratio	LCR
	NIS 983m 4Q21: NIS 529 m; 1Q21: NIS 662 m	18.3% 4Q21: 9.8%; 1Q21: 13.8%	55.3% 4Q21: 71.2%; 4Q20: 65.1%	(0.11%) 4Q21: (0.02%) 1Q21: (0.30%)	6.3% 4Q21: 6.0% 1Q21: 6.1%	124.8% 4Q21: 123.1% 1Q21: 145.6%
d e st u dj A	NIS 668 m 4Q21: NIS 674 m; 1Q21: NIS 738 m	12.4% 4Q21: 12.5%; 1Q21: 15.3%	63.7% 4Q21: 62.1%; 1Q21: 60.6%

6 * Adjusted for certain items presented on slide 22

ROBUST, SUSTAINABLE AND RESPONSIBLE GROWTH ACROSS ALL SECTORS ESPECIALLY TARGETED SEGMENTS

7 * During 1Q22 Discount sold a portion of the mortgage portfolio; ** During 1Q22 NIS 993m, which now meet the regulatory definition as "Medium", were transferred from Corporate. Adjusted Corporate balances were +6.5% YoY and (1.7%) QoQ and Medium +19.4% and 6.2% respectively.

HIGHER FEE AND NET INTEREST INCOME HIGHLIGHT STRENGTH OF CORE BUSINESS

8 * Adjusted for certain items presented on slide 22

HIGH QUALITY LOANS AND CONSERVATIVE UNDERWRITING PRODUCE SOLID CREDIT METRICS

9 * Net write-offs are calculated as a percent of avg. balance of credit on an accumulated basis

SUBSIDIARIES

ROBUST CREDIT GROWTH DELIVERS STRONG NET INCOME AND ROE

• Strong ROE of 12.9% and solid net income of NIS 121 million at Mercantile were driven by credit growth, supportive CPI and carefully managed expenses.
• Loan book expansion of 5.0% in 1Q22 was mainly driven by significant growth across the entire loan book. Mortgages were up 7.5%, Commercial up 5.4% Small enterprises up 3.4% and Consumer up 2.8%.
• Expenses were slightly lower producing a positive JAWS ratio in the quarter and Cost-income ratio of 53.8%.

150

18.5%

1Q21 4Q21 1Q22

13.2%

5.9

5.0% QoQ

15.8% YoY

DEMAND FOR CREDIT AND NEGATIVE LLP LED TO SOLID RESULTS

• IDBNY solid net income of \$28 million is driven by strong credit growth, up 16.5% annually, across all regions, improved margins and a release of provisions.
• Strong year over year deposit growth up 13.8% continued to provide liquidity for loan growth and disciplined management of cost of funds contributed to overall improvement in margins.
• 1Q22 produced a release of provision for credit losses of \$6.6 million vs. a release of \$4.8m in 4Q 2021. On January 1st IDBNY adopted CECL accounting for the allowance for credit losses.

A STRONG QUARTER ACROSS ALL INDICATORS WITH NEW STRATEGIC INITIATIVES

• CAL produced robust net income of NIS 80 million and 14.3% ROE supported by a 22.9% increase in consumer credit and a 20.5% increase in transaction turnover.
• A negative change in allowance for credit losses on the back of an improving economy led to negative credit loss expenses.
• A number of strategic initiatives were closed during 1Q22 including credit as a service agreements with PAZ and BIT. A new loyalty club with Electra Consumer and a 3 year extension with Shufesal and lastly a new payment as a service agreement with PayBox.

STRATEGY

OUR FOCUSED 5-YEAR STRATEGIC PLAN ENABLES ACHIEVEMENT OF AMBITIOUS 2025 FINANCIAL TARGETS

ULTIMATE GOAL:

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

Q&A

Barak Nardi, CFO Yossi Beressi, Chief Accountant

APPENDICES

PROFIT & LOSS AND SELECTED RATIOS

NIS m	1Q22	4Q21	1Q21	Vs. 4Q21	Vs. 1Q21
Net interest income	1,800	1,683	1,504	7.0%	19.7%
Credit loss expenses (expenses release)	(60)	(10)	(147)	(500.0%)	59.2%
Non-interest financing income	45	180	298	(75.0%)	(84.9%)
Commissions	825	809	724	2.0%	14.0%
Other income	416	50	11	732.0%	3681.8%
Total non-interest income	1,286	1,039	1,033	23.8%	24.5%
Total income	3,086	2,722	2,537	13.4%	21.6%
Salaries and related expenses	855	970	801	(11.9%)	6.7%
Maintenance & depreciation	303	293	294	3.4%	3.1%
Other expenses	549	676	557	(18.8%)	(1.4%)
Total operating and other expenses	1,707	1,939	1,652	(12.0%)	3.3%
Income before taxes	1,439	793	1,032	81.5%	39.4%
Provision for taxes on income	447	269	353	66.2%	26.6%
Income after taxes	992	524	679	89.3%	46.1%
Net income attributable to shareholders	983	529	662	85.8%	48.5%
ROE	18.3%	9.8%	13.8%
Cost income ratio	55.3%	71.2%	65.1%
CET-1 ratio	10.55%	10.14%	10.20%
NIM	2.36%	2.30%	2.25%
Rate of credit loss expenses	(0.11%)	(0.02%)	(0.30%)
NPL ratio	0.70%	0.59%	0.84%
Dividend per share (in Agurot)*	15.89	9.08	-

* Dividend in respect of the relevant period

ADJUSTED PROFIT & LOSS & SELECTED RATIOS

NIS m	1Q22	4Q21	1Q21	Vs. 4Q21	Vs. 1Q21
Net interest income	1,800	1,683	1,504	7.0%	19.7%
Credit loss expenses (expense release)	(60)	(10)	(147)	500.0%	(59.2%)
Non-interest financing income	45	180	298	(75.0%)	(84.9%)
Commissions	825	809	724	2.0%	14.0%
Other income	8	2	11	300.0%	(27.3%)
Total non-interest income	878	991	1,033	(11.4%)	(15.0%)
Total income	2,678	2,674	2,537	0.1%	5.6%
Salaries and related expenses	855	735	801	16.3%	6.7%
Maintenance & depreciation	303	293	294	3.4%	3.1%
Other expenses	549	633	442	(13.3%)	24.2%
Total operating and other expenses	1,707	1,661	1,537	2.8%	11.1%
Income before taxes	1,031	1,023	1,147	0.8%	(10.1%)
Provision for taxes on income	354	354	392	-	(9.7%)
Income after taxes	677	669	755	1.2%	(10.3%)
Net income attributable to shareholders	668	674	738	(0.9%)	(9.5%)
ROE	12.4%	12.5%	15.3%
Cost income ratio	63.7%	62.1%	60.6%
CET-1 ratio	10.52%	10.14%	10.20%
NIM	2.36%	2.30%	2.25%
Rate of credit loss expenses	(0.11%)	(0.02%)	(0.30%)
NPL ratio	0.70%	0.59%	0.84%
Dividend per share (in Agurot)*	15.89	9.08	-

* Dividend in respect of the relevant period

ADJUSTMENTS TO PROFIT & LOSS

		Gross		Net
NIS m	1Q22	4Q21	1Q21	1Q22	4Q21	1Q21
Retirement benefits		14	115		9	76
Early redemption of long term benefits		29			19
Provisions for new salary agreement		235			155
Income from real estate sales	(408)	(48)		(315)	(38)
Total	(408)	230	115	(315)	145	76

SELECTED BALANCE SHEET ITEMS

NIS m	31.03.22	31.12.21	31.03.21
Cash and deposits with banks	60,997	59,638	50,307
Securities*	44,074	45,076	45,347
Credit to the public	220,733	216,196	196,901
Provision for credit loss	(2,882)	(3,040)	(3,609)
Credit to the public, net	217,851	213,156	193,292
Credit to governments	2,553	2,664	3,520
Investment in investee companies	455	462	355
Buildings and equipment	3,441	3,401	3,012
Intangible assets and goodwill	163	163	164
Assets in respect of derivative instruments	5,732	5,522	5,099
Other assets	5,392	5,006	5,046
Total Assets	340,658	335,088	306,142
Deposits from the public	267,731	260,907	240,787
Deposits from banks**	13,342	12,880	12,534
Bonds and subordinated debt notes	12,211	15,071	10,136
Liabilities in respect of derivative instruments	5,892	6,323	4,919
Other liabilities	17,773	17,759	17,368
Total liabilities	316,949	312,940	285,744
Equity capital attributed to the Bank's shareholders	23,027	21,483	19,836
Non-controlling rights in consolidated companies	682	665	562
Total equity	23,709	22,148	20,398
Total Liabilities and Equity	340,658	335,088	306,142

* Including securities borrowed or purchased under agreements to resell

** Including deposits from governments

FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	1Q22	4Q21	1Q21	Vs. 4Q21	Vs. 1Q21
Net interest income	359	342	306	5.0%	17.3%
Credit loss expenses (expenses release)	25	(6)	(9)	n/a	n/a
Non-interest income	89	94	155	(5.3%)	(42.6%)
Total income	448	436	461	2.8%	(2.8%)
Operating & other expenses	241	309	243	(22.0%)	(0.8%)
Net income	121	91	150	33.0%	(19.3%)
Return on equity	12.9%	10.2%	18.5%
Cost-income ratio	53.8%	70.9%	52.7%
Rate of credit loss expenses	0.30%	(0.06%)	(0.10%)
NIM	2.51%	2.60%*	2.54%
Total assets	60,900	59,894	51,363	1.7%	18.6%
Credit to the public, net	39,494	37,636	34,022	4.9%	16.1%
Securities	7,035	6,883	5,733	2.2%	22.7%
Deposits from the public	48,881	48,070	41,476	1.7%	17.9%
Total equity	3,691	3,771	3,337	(2.1%)	10.6%

FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

USD m	1Q22	4Q21	1Q21	Vs.	Vs.
				4Q21	1Q20
Net interest income	72	71	59	1.0%	21.2%
Credit loss expenses (expenses release)	(7)	(5)	17	n/a	n/a
Non-interest income	18	21	23	(17.7%)	(22.7%)
Total income	89	92	82	(3.9%)	9.0%
Operating & other expenses	58	55	52	7.2%	12.7%
Net income	28	30	10	(6.9%)	183.9%
Return on equity	9.7%	10.4%	3.4%
Cost-income ratio	64.4%	58.1%	63.4%
Rate of credit loss expenses	(0.31%)	(0.23%)	0.96%
NIM	2.34%	2.41%	2.28%
Total assets	12,980	12,952	11,667	0.2%	11.3%
Loans, net	8,564	8,421	7,354	1.7%	16.5%
Securities	2,804	2,829	2,966	(0.9%)	(5.5%)
Deposits from the public	11,301	11,245	9,928	0.5%	13.8%
Total equity	1,116	1,158	1,148	(3.6%)	(2.8%)

FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	1Q22	4Q21	1Q21	Vs. 4Q21	Vs. 1Q21
Income from credit card transactions	377	388	317	(2.8%)	18.9%
Net interest income	160	146	129	9.6%	24.0%
Credit loss expenses (expenses release)	(1)	9	(4)	n/a	75%
Non-interest financing income	17	1	1	1600.0%	1600.0%
Total income	554	535	447	3.6%	23.9%
Total expenses (excluding credit loss expenses)	440	462	364	(4.8%)	20.9%
Net income	80	40	60	100%	33.3%
Return on equity	14.3%	7.5%	12.9%
Cost-income ratio	79.4%	86.4%	81.4%
Total assets	16,867	16,076	19,385	4.9%	(13.0%)
Interest bearing credit	7,188	6,717	5,822	7.0%	23.5%
Consumer credit	6,180	5,777	5,030	7.0%	22.9%
Total equity	2,305	2,216	1,989	4.0%	15.9%