Israel Discount Bank Ltd.

Investor Presentation • Mar 9, 2022

2021 REVIEW

FINANCIAL AND STRATEGIC HIGHLIGHTS

Investor Relations

March 9, 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 2021 full year and 4th 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 2021full year and 4 th 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

DISCOUNT GROUP ACHIEVED RECORD RESULTS THROUGH SOLID EXECUTION

STRONG UNDERLYING SUSTAINABLE PERFORMANCE ACROSS KEY INDICATORS

2021 CREDIT GROWTH +12.3% 2021EMPLOYEE PRODUCTIVITY +12.2% 2021 MORTGAGE ORIGINATIONS +69.3%

5 * Adjusted for certain items presented on slide 28

** Normalized ROE = Replaces current credit loss expense ratio of (-0.56%)with the average credit loss expense ratio for the years 2016-2019 of 0.37%.

SUCCESSFUL JOURNEY OF SUPERIOR EXECUTION

6 * Price to Book and Market cap are presented at 31/12 of 2014 and 2021 respectively

HIGH CONFIDENCE IN OUR ABILITY TO INCREASE THE PACE AND DELIVER AMBITIOUS TARGETS

	Net income (Adjusted and normalized)	ROE (Adjusted and normalized)	Efficiency Ratio (Adjusted)
2014 WHERE WE STARTED	896m	7.4%	78.6%
2021 WHERE WE ARE	2,070m	10.1%	61.6%
2025 WHERE WE GOING	3,500m	12.5%	55.0%

7 * Adjusted for certain items presented on slide 28

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

Financial Review

Barak Nardi, CFO

4Q AND FY 2021 HIGHLIGHTS

• Adjusted ROE of 14.8% in 2021 and 13.1% in 4Q21 driven by:
  • Total Income strength (up 5.9% in 2021, +12.7% vs. 4Q20 and +1.9% vs 3Q21) generated by core banking growth.
  • Credit expense release of (0.34%) in 2021 and (0.02%) in Q4 driven by low net write-offs and a release of provisions
  • Continued controlled salary expenses excluding bonuses as the early retirement plan of 2020 make an impact
• Strong Total Credit growth of 12.3% YoY and 4.5% in 4Q mainly in strategically focused sectors; mortgages and medium businesses
• Strong Asset Quality with write—offs as a percent of total average credit at 0.03% and an NPL ratio of 0.59% at the end of 2021
• Solid execution at all subsidiaries drives robust Group performance
• Reached ground breaking new agreement with the union
• Dividend payout of NIS 105.8 m; 20% of Q4 21 net income

1 2 Q 4	Net income NIS 529m 3Q21: NIS 722 m; 4Q20: NIS 264 m	ROE 10.2% 3Q21: 14.5%; 4Q20: 5.6%	Cost-income ratio 71.2% 3Q21: 62.0%; 4Q20: 75.4%	Credit loss expenses ratio (0.02%) 3Q21: (0.25%) 4Q20: 0.42%	1 2 0 2	Net income NIS 2,773m 2020: NIS 975 m	ROE 13.6% 2020: 5.1%	Cost-income ratio 65.4% 2020: 67.5%	Credit loss expenses ratio (0.34%) 2020: 0.91%
d e st u dj A	NIS 674 m 3Q21: NIS 726 m; 4Q20: NIS 421 m	13.1% 3Q21: 14.6%; 4Q20: 9.1%	62.1% 3Q21: 61.7%; 4Q20: 65.8%		d e st u dj A	NIS 3,016m 2020: NIS 1,287 m	14.8% 2020: 6.7%	61.6% 2020: 62.5%

9 * Adjusted for certain items presented on slide 28

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

10 * Regulatory segments, in Israel

** Balance of household credit excluding mortgages and credit cards

FEE AND NII GROWTH COUPLED WITH REDUCTION IN SALARY EXPENSES LED TO IMPROVED EFFICIENCY

11 * Adjusted for certain items presented on slide 28

HIGH QUALITY LOANS AND CONSERVATIVE UNDERWRITING PRODUCE SOLID CREDIT METRICS

Allowance for LLP/ Total Credit (gross) 1.38% 1.95% 1.51% 1.41% 4Q19 4Q20 3Q21 4Q21

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

Strategic Review and Guidance

Barak Nardi, CFO

DRIVING VALUE THROUGH OUR AMBITIOUS 5-YEAR STRATEGIC PLAN

ULTIMATE GOAL:

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

VALUE FOR SHAREHOLDERS, OVER TIME

EXPANDING CREDIT WITH ROBUST PERFORMANCE ESPECIALLY IN MORTGAGES AND MIDDLE MARKETS

Mortgage origination (NIS bn) and market share

Mortgage Balance (NIS bn) and market share

PROACTIVELY ACQUIRING NEW CUSTOMERS THROUGH UNIQUE VALUE OFFERINGS

Customer acquisition through "Switch with a Click"

2.4x Net positive customer acquisition ratio

Actively Focused on winning share

• No charge for first NIS 2,000 of overdraft
• "We Want you More" campaign
• Increasing "NPS - net promoter score"
• Attractive mortgage offerings

INCREASING EFFICIENCY THROUGH HIGHER PRODUCTIVITY AND HEADCOUNT REDUCTION

17 * Adjusted for certain items presented on slide 28

GAINING FLEXIBILITY THROUGH THE GROUND BREAKING NEW SALARY AGREEMENT

GENERATING VALUE THROUGH DISRUPTIVE INNOVATION

Leveraging our competitive positioning

• Discount Group benefits from unique competitive position of being large enough to lead change, while being small enough to not fear cannibalization.
• Significant opportunity to increase market share by establishing new non-banking ventures with third parties and fintech.
• Focused on generating value

Linked accounts (as at 31.12.21)

1.6m +26% vs 2020

Active Users* (as at 31.12.21) 1.0m

+32% vs 2020

Transaction volume 2021

+60% vs 2020

DELIVERING OUTSTANDING PERFORMANCE ACROSS ALL OF OUR SUBSIDIARIES

SETTING NEW AMBITIOUS TARGETS AS WE INCREASE THE PACE OF VALUE GENERATION

Q& A

Uri Levin, CEO Barak Nardi, CFO Yossi Beressi, Chief Accountant

APPENDICES

PROFIT & LOSS AND SELECTED RATIOS

NIS m	4Q21	3Q21	4Q20	Vs. 3Q21	Vs. 4Q20	2021	2020	Change
Net interest income	1,683	1,657	1,504	1.6%	11.9%	6,529	5,898	10.7%
Credit loss expenses (expenses release)	(10)	(126)	200	(92.1%)	(105.0%)	(693)	1,718	(140.3%)
Non-interest financing income	180	198	148	(9.1%)	21.6%	765	1,142	(33.0%)
Commissions	809	807	739	0.2%	9.5%	3,125	2,826	10.6%
Other income	50	10	24	400.0%	108.3%	72	39	84.6%
Total non-interest income	1,039	1,015	911	2.4%	14.1%	3,962	4,007	(1.1%)
Total income	2,722	2,672	2,415	1.9%	12.7%	10,491	9,905	5.9%
Salaries and related expenses	970	867	794	11.9%	22.2%	3,468	3,242	7.0%
Maintenance & depreciation	293	292	337	0.3%	(13.1%)	1,187	1,185	0.2%
Other expenses	676	497	689	36.0%	(1.9%)	2,203	2,254	(2.3%)
Total operating and other expenses	1,939	1,656	1,820	17.1%	6.5%	6,858	6,681	2.6%
Income before taxes	793	1,142	395	(30.6%)	100.8%	4,326	1,506	187.3%
Provision for taxes on income	269	401	159	(32.9%)	69.2%	1,516	549	176.1%
Income after taxes	524	741	236	(29.3%)	122.0%	2,810	957	193.6%
Net income attributable to shareholders	529	722	264	(26.7%)	100.4%	2,773	975	184.4%
ROE	10.2%	14.5%	5.6%			13.6%	5.1%
Cost income ratio	71.2%	62.0%	75.4%			65.4%	67.5%
CET-1 ratio	10.14%	10.29%	10.20%			10.14%	10.20%
NIM	2.32%	2.38%	2.31%			2.34%	2.35%
Rate of credit loss expenses	(0.02%)	(0.25%)	0.42%			(0.34%)	0.91%
NPL ratio	0.59%	0.69%	0.74%			0.59%	0.74%
Dividend per share (in Agurot)*	9.08	12.41	-			21.49	4.19

* Dividend in respect of the relevant period

24

ADJUSTED PROFIT & LOSS & SELECTED RATIOS

NIS m	4Q21	3Q21	4Q20	Vs. 3Q21	Vs. 4Q20	2021	2020	Change
Net interest income	1,683	1,657	1,504	1.6%	11.9%	6,529	5,898	10.7%
Credit loss expenses (expense release)	(10)	(126)	200	92.1%	(105.0%)	(693)	1,718	(140.3%)
Non-interest financing income	180	198	148	(9.1%)	21.6%	765	1,054	(27.4%)
Commissions	809	807	739	0.2%	9.5%	3,125	2,826	10.6%
Other income	2	10	24	(80.0%)	(91.7%)	24	39	(38.5%)
Total non-interest income	991	1,015	911	(2.4%)	8.8%	3,914	3,919	(0.1%)
Total income	2,674	2,672	2,415	0.1%	10.7%	10,443	9,817	6.4%
Salaries and related expenses	735	867	801	(15.2%)	(8.2%)	3,233	3,211	0.7%
Maintenance & depreciation	293	292	297	0.3%	(1.3%)	1,168	1,145	2.0%
Other expenses	633	490	490	29.2%	29.2%	2,031	1,776	14.4%
Total operating and other expenses	1,661	1,649	1,588	0.7%	4.6%	6,432	6,132	4.9%
Income before taxes	1,023	1,149	627	(11.0%)	63.1%	4,704	1,967	139.1%
Provision for taxes on income	354	404	236	(12.4%)	49.8%	1,651	707	133.4%
Income after taxes	669	745	391	(10.2%)	71.1%	3,053	1,260	142.3%
Net income attributable to shareholders	674	726	421	(7.2%)	60.1%	3,016	1,287	134.3%
ROE	13.1%	14.6%	9.1%			14.8%	6.7%
Cost income ratio	62.1%	61.7%	65.8%			61.6%	62.5%
CET-1 ratio	10.14%	10.29%	10.20%			10.14%	10.20%
NIM	2.32%	2.38%	2.31%			2.34%	2.35%
Rate of credit loss expenses	(0.02%)	(0.25%)	0.42%			(0.34%)	0.91%
NPL ratio	0.59%	0.69%	0.74%			0.59%	0.74%
Dividend per share (in Agurot)*	9.08	12.41	-			21.49	4.19

* Dividend in respect of the relevant period

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

SELECTED BALANCE SHEET ITEMS

NIS m	31.12.21	30.09.21	31.12.20
Cash and deposits with banks	59,638	46,334	42,936
Securities*	45,076	47,104	43,859
Credit to the public	216,196	206,944	192,479
Provision for credit loss	(3,040)	(3,117)	(3,761)
Credit to the public, net	213,156	203,827	188,718
Credit to governments	2,664	3,127	3,473
Investment in investee companies	462	392	348
Buildings and equipment	3,401	3,203	2,995
Intangible assets and goodwill	163	163	164
Assets in respect of derivative instruments	5,522	4,367	6,400
Other assets	5,006	4,894	5,076
Total Assets	335,088	313,411	293,969
Deposits from the public	260,907	245,393	226,118
Deposits from banks**	12,880	13,920	13,451
Securities lent or sold under agreements to repurchase	-	-	161
Bonds and subordinated debt notes	15,071	11,170	10,201
Liabilities in respect of derivative instruments	6,323	4,570	7,365
Other liabilities	17,759	16,352	16,946
Total liabilities	312,940	291,405	274,242
Equity capital attributed to the Bank's shareholders	21,483	21,346	19,182
Non-controlling rights in consolidated companies	665	660	545
Total equity	22,148	22,006	19,727
Total Liabilities and Equity	335,088	313,411	293,969

• Including securities borrowed or purchased under agreements to resell

27

FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	4Q21	3Q21	4Q20	Vs. 3Q21	Vs. 4Q20	2021	2020	Change
Net interest income	342	341	301	0.3%	13.6%	1,324	1,219	8.6%
Credit loss expenses (expenses release)	(6)	7	46	n/a	n/a	(81)	320	n/a
Non-interest income	94	79	90	19.0%	4.4%	469	426	10.1%
Total income	436	420	391	3.8%	11.5%	1,793	1,645	9.0%
Operating & other expenses	309	228	282	35.5%	9.6%	1,021	999	2.2%
Net income	91	120	40	(24.2%)	127.5%	562	211	166.4%
Return on equity	10.2%	14.1%	5.1%			16.2%	6.6%
Cost-income ratio	70.9%	54.3%	72.1%			56.9%	60.7%
Rate of credit loss expenses	(0.06%)	0.08%	0.56%			(0.23%)	0.98%
NIM	2.60%	2.69%	2.54%			2.63%	2.71%
Total assets	59,894	54,058	50,935	10.8%	17.6%
Credit to the public, net	37,636	36,035	33,118	4.4%	13.6%
Securities	6,883	6,431	6,300	7.0%	9.3%
Deposits from the public	48,070	42,924	40,842	12.0%	17.7%
Total equity	3,771	3,650	3,239	3.3%	16.4%

FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

USD m	4Q21	3Q21	4Q20	Vs. 3Q21	Vs. 4Q20	2021	2020	Change
Net interest income	71	64	59	10.9%	20.3%	257	237	8.4%
Credit loss expenses (expenses release)	(5)	(9)	10	n/a	n/a	(5)	37	n/a
Non-interest income	22	21	15	4.8%	46.7%	87	72	20.8%
Total income	93	85	74	9.4%	25.7%	344	309	11.3%
Operating & other expenses	54	57	68	(5.3%)	(20.6%)	222	204	6.7%
Net income	30	27	1	11.1%	3000.0%	92	58	58.6%
Return on equity	10.4%	9.3%	0.4%			7.9%	5.1%
Cost-income ratio	58.1%	67.1%	91.9%			64.5%	66.0%
Rate of credit loss expenses	(0.23%)	(0.47%)	0.57%			(0.07%)	0.54%
NIM	2.43%	2.43%	2.39%			2.33%	2.44%
Total assets	12,952	11,725	11,010	10.5%	17.6%
Loans, net	8,421	7,840	7,155	7.4%	17.7%
Securities	2,829	2,716	2,746	4.2%	3.0%
Deposits from the public	11,245	10,225	9,001	10.0%	24.9%
Total equity	1,158	1,145	1,153	1.1%	0.4%

FINANCIAL PERFORMANCE

Main P&L and Balance Sheet metrics and selected ratios

NIS m	4Q21	3Q21	4Q20	Vs. 3Q21	Vs. 4Q20	2021	2020	Change
Income from credit card transactions	388	381	323	1.8%	20.1%	1,432	1,254	14.2%
Net interest income	146	140	128	4.3%	14.1%	548	534	2.6%
Credit loss expenses (expenses release)	9	1	33	800.0%	(72.7%)	(9)	223	n/a
Non-interest financing income	1	4	(1)	(75.0%)	(200.0%)	5	73	(93.2%)
Total income	535	525	450	1.9%	18.9%	1,985	1,861	6.7%
Total expenses (excluding credit loss expenses)	462	467	382	(1.7%)	5.5%	1,603	1,493	7.4%
Net income	40	92	28	(56.5%)	42.9%	271	115	135.7%
Return on equity	7.5%	18.7%	6.0%			13.2%	6.2%
Cost-income ratio	86.4%	75.0%	84.9%			80.8%	80.4%
Total assets	16,076	15,165	18,535	6.0%	(13.3%)
Interest bearing credit	6,717	6,245	5,959	7.6%	12.7%
Consumer credit	5,777	5,447	5,165	6.1%	11.8%
Total equity	2,216	2,159	1,930	2.6%	14.8%