Israel Discount Bank Ltd.

Investor Presentation • Mar 27, 2022

EQUITY CAPITAL RAISE

Increasing the Momentum of our Growth

Investor Relations

March 27, 2022

Disclaimer:

This document has been prepared by Israel Discount Bank Ltd. (the "Bank") solely for use by the Bank in its equity capital raising process. The financial information herein is based on the information presented in the Bank's 2021 full year 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 including on slides 6, 10 and 11. 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.

STRONG 2021 PERFORMANCE ACROSS KEY INDICATORS

NIS 2,070m adjusted and normalized

2021 ROE

10.1% adjusted and normalized

2021 CREDIT GROWTH +12.3%

2021EMPLOYEE PRODUCTIVITY +12.2%

2021 MORTGAGE ORIGINATIONS +69.3%

3 * Adjusted for certain items presented on slide 13

** Normalized ROE = Replaces current credit loss expense ratio with the average credit loss expense ratio for the years 2016-2019 of 0.37%.

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

4 * Regulatory segments, in Israel

** Balance of household credit excluding mortgages and credit cards

HIGH QUALITY LOANS AND CONSERVATIVE UNDERWRITING PRODUCE SOLID CREDIT METRICS

4Q19 4Q20 3Q21 4Q21

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

WHY WE ARE RAISING CAPITAL

• Realize significant growth potential, with an emphasis on mortgages and medium sized enterprises 1
• Take advantage of the unique market opportunities created by our leverage ratio and relative exposure to real estate that have significant buffers to regulatory requirements 2
• Act on the sharp rise in yields that imply an increase in interest rates which will have two impacts on the Bank: 3
  • a short term negative impact on our capital adequacy ratios of 0.3%
  • a significant increase in net interest income which coupled with continued growth of credit will deliver superior value for shareholders, if the current market expectations are realized

CONTINUING THE MOMENTUM OF RESPONSIBLE, PROFITABLE AND FOCUSED GROWTH ¹

Mortgage origination (NIS bn) and market share

Mortgage Balance (NIS bn) and market share

TAKING ADVANTAGE OF CURRENT MARKET OPPORTUNITIES ²

INCREASE IN YIELDS AND INTEREST EXPECTATIONS TO IMPROVE PROFITABILITY OVER TIME 3

Market expectations for a rise in interest rate have increased significantly since the beginning of the year

Short term negative impact on assets held for sale in the securities portfolio impacts the CET-1 ratio of 0.3% Significant upside to net interest income from increases in interest rates in the mid to long term

ADDITIONAL CAPITAL TO BOOST DRIVING VALUE THROUGH OUR STRATEGIC PLAN

ULTIMATE GOAL:

TO BE THE BEST FINANCIAL INSTITUTION FOR ITS CUSTOMERS, DELIVERING SUPERIOR

VALUE FOR SHAREHOLDERS, OVER TIME

INCREASING THE PACE OF VALUE GENERATION TOWARDS OUR 2025 FINANCIAL TARGETS

* Adjusted for certain items presented on slide 13

11 ** The word "normalized" applies only to 2021 in which the current credit loss expense ratio is replaced with the average credit loss expense ratio for the years 2016-2019 of 0.37%.

APPENDIX

ADJUSTMENTS TO PROFIT & LOSS

	Gross		Net			Gross		Net
NIS m	4Q21	3Q21	4Q20	4Q21	3Q21	4Q20	2021	2020	2021	2020
Retirement benefits	14	7	373	9	4	246	143	413	94	272
Early redemption of long term benefits	29			19			29		19
Provisions for new salary agreement	235		(7)	155		(3)	235	31	155	15
Income from real estate sales	-48			(38)			(48)		(38)
Australia			(174)			(112)		65		43
Sales of Visa Inc. shares								(88)		(44)
Depreciation (NY Headquarters)			40			26	19	40	13	26
Total	230	7	232	145	4	157	378	461	243	312