Israel Discount Bank Ltd.

Investor Presentation • Aug 14, 2025

Financial Highlights

Q2 2025 Highlights – Delivering on Our Strategic Roadmap

Solid Progress Across Core Strategic Pillars – Growth, Efficiency, and Leadership in Digital Banking

New Collective Labor Agreement Enhances managerial flexibility and promote a culture of excellence. Allows for termination of up to 75 permanent employees holding tenure status. Estimated total cost: approximately NIS 65 million annually. 30% saving compared to the previous agreement.

Credit Expansion

Growth Strategy Strong growth in the credit portfolio of banking in Israel, up 3.6% QoQ.

Execution of the Efficiency Plan

Digital Leadership

Reinforced

Initiation of the efficiency plan implementation in Mercantile and improving business performance and increased focus in IDBNY.

Continued excellence in digital banking customer satisfaction, based on the latest BoI industry survey

BoI Survey: July 2025, Digital banking – internet site and mobile app

Divestment of CAL

Entering negotiations to sell the banks holdings in CAL

The bank is in negotiations with three bidding groups, which have advanced to the second stage, to enter into a binding agreement for the sale of its holdings in CAL.

The Bank determined that the conditions for classifying CAL as a "disposal group held for sale" and as a "discontinued operation" have been met.

Accordingly, beginning with the second quarter 2025 report, CAL is presented as a "discontinued operation." classifying

VAT court ruling regarding CAL and other credit card companies

The Court ruled that Fees on foreign currency transactions conducted abroad while "card-notpresent" are subject to the full VAT rate, except for certain sectors. CAL is reviewing the judgment and, at this stage, the bank has recorded a provision of NIS 75 million in respect of the tax assessment.

2Q 2025 - Delivering Robust Performance

* The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

** Consolidated figures for banking operations of Discount & Mercantile

The Economy is at full employment GDP growth is expected to shift direction in 2025 and rebound in 2026

The war has impacted GDP growth in 2024, with recovery anticipated in 2025 & 2026 (GDP growth, in %)

Job market shows resilience and strength

Source: BoI, July 2025

Source: CBS, July 2025

Expectations for BOI to slowly reduce rate Inflation is expected to converge within limits

Bank of Israel Holds Rate; Market Anticipates Slower Pace of Future Cuts

(Market Expectations for BoI Rate at end of 2025 on specific dates, %)

Inflation is projected to converge within BOI middle range (Israel Inflation - CPI Forwards, %)

2Q25 Financial Highlights

• Net Income NIS 1.12B (13.6% ROE), Supported by 10.0% NII with high CPI backwind, and 1.5% Fee Growth QoQ.
• Robust Credit Expansion: Total Credit Up 1.9% QoQ (8.8% YoY) and Banking in Israel by 3.6% QoQ, Driven by Corporate (5.3%), SME (1.8%), and Mortgage (2.6%) Increase.
• Credit Loss Provision, were maintained at 0.09%, with the provision primarily driven by the collective allowance. NPL experienced a slight increase, reaching 0.70%.
• Operating efficiency reached 46.1% compared with 48.8% in 1Q25
• NII grew by 10%, significantly supported by the impact of CPI, which contributed NIS 277 million (up from NIS 62 million last quarter).
• Dividend payout of 50% of the net profit for 2Q25, in line with dividend policy.

	Net Income, NIS m	ROE %	Cost-Income Ratio, %	Credit Loss Expenses Ratio, %		Net Income, NIS m	ROE %	Cost-Income Ratio, %	Credit Loss Expenses Ratio, %
2Q25	1,115	13.6	46.1	0.09	1H25	2151	13.3	47.4	0.08
1Q25	1,036	13.0	48.8	0.07	1H24	2,095	14.4	47.3	0.07
2Q24	1,045	14.1	46.6	0.30
d 2Q25 e	1,272	15.6	46.5		d 1H25 e	2,363	14.6	47.8
ust 1Q25	1,091	13.7	49.2		ust 1H24	2,215	15.2	47.0
dj 2Q24 A	1,115	15.1	46.1		dj A

The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

Robust Credit Growth Driven By the Corporate Segment

Excl. Households Mortgages

The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

Credit Loss Expenses & NPL Ratio

Loan Loss Provision remains low reflecting stable macroeconomic parameters and the financial condition of borrowers in NIS m and %

Allowance for Loan Loss Provisions from Total Credit – Strong and Stable Macroeconomic Environment Enables Reversal of Loan Loss Provisions*

1.43%

-100

-50

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

* Reclassified – Without CAL The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

-0.30%

-0.50%

-0.10%

0.10%

0.30%

0.50%

0.70%

0.90%

Increase in Revenues – NII & Fees

The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

10

value adjustments, profit or loss from investments in shares, exchange rates

differences, net profit on the sale of loans

Advancing from expense containment to sustainable cost efficiencies

Total Expenses in NIS m

11 The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

Robust and diversified funding base With strong Capital Ratio

Maintaining solid LCR And NSFR well above the regulatory requirement (100%)

Capital Ratio well above the regulatory requirement

NIS 13%		Total Capital Ratio	Tier I Capital Ratio	Leverage Ratio
Small	2Q25	13.47% QoQ	10.53% QoQ	6.7% QoQ
businesses		-0.01%	-0.01%	-2.9%
	Regulatory	12.50%	9.20%	4.5%
Medium	Requirement

The comparative figures have been restated to reflect the classification of CAL's operations as "discontinued operations"

Contribution to Profit from key subsidiaries

To summarize

Continuous strong results for 2Q25	Net income of 1.12 bil NIS, and ROE of 13.6%, Banking in Israel achieved net income of 1.1 bil NIS and ROE of 18.1%.
Strong credit growth	We maintained strong credit growth, with solid asset quality - Credit growth of 1.9% in 2Q25, and 3.6% in Banking in Israel.
Low Credit loss provisions	Credit loss provisions of 0.09% with specific provisions remain low at 23M NIS, while NPL ratio edged up to 0.70% with a sufficient allowance cover-ratio, standing at 1.30%.
Strategic Cost Management	Transitioning from expense restraint to higher efficiency and savings.
New Collective Labor Agreement	Enhanced managerial flexibility and promotion of a culture of excellence
Dividend distribution raised to 50%	Recording the highest dividend distribution in the bank's history

Israel Discount Bank: P&L and Selected Ratios

NIS m	2Q25	1Q25	2Q24	vs.1Q25	vs.2Q24
Net interest income	2,658	2,417	2,620	10.0%	1.5%
Credit loss expenses	60	52	191	15.4%	(68.6%)
Non-interest financing income	274	279	257	(1.8%)	6.6%
Commissions	526	518	477	1.5%	10.3%
Other income	32	35	-	(8.6%)	-
Total non-interest income	832	832	734	-	13.4%
Total income	3,490	3,249	3,354	7.4%	4.1%
Salaries and related expenses	863	892	840	(3.3%)	2.7%
Maintenance & depreciation	348	341	327	2.1%	6.4%
Other expenses	399	352	396	13.4%	0.8%
Total operating and other expenses	1,610	1,585	1,563	1.6%	3.0%
Income before taxes	1,820	1,612	1,600	12.9%	13.8%
Provision for taxes on income	667	649	619	2.8%	7.8%
Income after taxes	1,153	963	981	19.7%	17.5%
Net income attributable to shareholders	1,115	1,036	1,045	7.6%	6.7%
ROE	13.6%	13.0%	14.1%
Cost income ratio	46.1%	48.8%	46.6%
NIM	2.70%	2.47%	3.01%
Rate of credit loss expenses	0.09%	0.07%	0.30%
NPL ratio	0.70%	0.67%	0.80%
Dividend per share (in Agurot)	36.38	25.32	25.34

Israel Discount Bank: Adjustments to P&L

NIS m	2Q25	1Q25	2Q24
Reported net income	1,115	1,036	1,045
Realization of Assets	(17)	(24)	-
Effect of change in VAT	-	-	(20)
Special income tax	86	79	54
Effect of settlement	-	-	11
Provision for discontinued operation (CAL)	13	-	25
Court decision regarding VAT (CAL)	75	-	-
Adjusted net income	1,272	1,091	1,115

Israel Discount Bank: Selected Balance sheet Items

NIS m	30.6.2025	30.6.2024	31.12.2024
Cash and deposits with banks	59,245	45,462	62,575
Securities	76,615	60,617	67,627
Credit to the public	280,986	258,143	270,997
Provision for credit losses	)3,660(	)3,693(	)3,685(
Credit to the public, net	277,326	254,450	267,312
Buildings and equipment	4,076	3,719	4,138
Assets in respect of derivative instruments	13,761	10,326	9,607
Other assets	5,243	5,430	5,289
Assets related to discontinued operations	21,701	20,889	22,229
Total Assets	461,005	405,281	442,659
Deposits from the public	339,190	303,305	332,443
Securities borrowed or sold via repo agreements	15,713	9,232	14,264
Bonds and subordinated debt notes	23,684	18,177	20,035
Liabilities in respect of derivative instruments	15,644	8,644	8,812
Liabilities related to discontinued operations	18,857	18,139	19,432
Total liabilities	426,627	374,147	409,574
Equity capital attributed to the Bank's shareholders	32,875	30,325	31,569
Non-controlling rights in consolidated companies	1,503	809	1,516
Total equity	34,378	31,134	33,085
Total Liabilities and Equity	461,005	405,281	442,659

Mercantile Discount Bank – principal data

NIS m	2Q25	2Q24	1H25	1H24	2024
Net profit attributed to the shareholders	230	225	436	409	843
Net interest income	572	580	1,110	1,108	2,220
Credit loss expenses	37	53	71	109	187
Non-financing income	117	99	226	210	403
Non-financing expenses	278	282	550	559	1,110
Total assets	67,960	66,657	67,960	66,657	66,509
Credit to the public, net	50,375	47,311	50,375	47,311	48,666
Securities	9,776	8,920	9,776	8,920	8,496
Deposits from the public	54,171	53,116	54,171	53,116	53,159
Total equity	5,866	5,217	5,866	5,217	5,733
%
Return on equity	15.6	17.9	14.9	16.3	16.2
Efficiency ratio	40.3	41.5	41.2	42.4	42.3
Ratio of total capital to risk assets	14.39	14.38	14.39	14.38	14.73
Ratio of credit loss expenses to the average balance of credit to the public	0.29	0.45	0.28	0.47	0.39
Total net return on interest bearing assets	3.55	3.77	3.46	3.62	3.55

Discount Bancorp, Inc. – principal data

US\$ m	2Q25	2Q24	1H25	1H24	2024
Net profit attributed to the shareholders	17	17	39	38	89
The contribution to the Bank's business results	13	17	29	38	75
Net interest income	90	79	180	160	328
Credit loss expenses	9	6	14	7	2
Non-financing income	21	21	42	39	77
Non-financing expenses	79	71	157	141	286
Total assets	13,638	12,276	13,638	12,276	13,856
Credit to the public, net	9,516	8,381	9,516	8,381	9,238
Securities	2,725	2,564	2,725	2,564	2,415
Deposits from the public	11,705	10,116	11,705	10,116	12,066
Total equity	1,380	1,254	1,380	1,254	1,319
%
Return on equity	4.9	5.3	5.8	6.1	7.0
Efficiency ratio	71.2	71.0	70.7	70.9	70.5
Ratio of total capital to risk assets	14.8	15.5	14.8	15.5	14.7
Ratio of credit loss expenses to the average balance of credit to the public	0.38	0.30	0.30	0.17	0.03
Total net return on interest bearing assets	2.74	2.77	2.76	2.83	2.79

Israel Credit Cards – principal data

NIS m	2Q25	2Q24	1H25	1H24	2024
Net profit attributed to the shareholders	73	81	170	162	301
The contribution to the Bank's business results	(30)	38	29	84	145
Income from credit card transactions	545	479	1,063	917	1,946
Net interest income	244	226	481	446	906
Non interest income	2	8	5	13	84
Non-financing expenses	689	607	1,326	1,157	2,545
Of which: Credit loss expenses	50	67	112	107	260
Total assets	21,559	20,759	21,559	20,759	22,089
Interest bearing credit to the public	9,776	8,981	9,776	8,981	9,385
Total equity	2,826	2,620	2,826	2,620	2,656
%
Return on equity	10.5	12.6	12.5	12.9	11.5
Efficiency ratio	80.8	75.7	78.4	76.3	77.8
Ratio of total capital to risk assets	13.3	13.3	13.3	13.3	12.8
Turnover of credit card transactions – in NIS millions	49,652	45,524	98,878	88,742	185,719
Number of active cards – in thousands	3,853	3,605	3,853	3,605	3,725

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 2025 report, as well as in strategic updates referred to in the Bank's reports. This presentation is not a substitute for the Bank's 2 nd quarter 2025 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.