Isracard Ltd. — Investor Presentation 2021

Sep 1, 2021

Investor Presentation

Financial Reports for June 30, 2021

1

This version is an English translation of the official and original version of the presentation published on the Tel Aviv Stock Exchange website on August 18th 2021, as drafted in Hebrew. This translation is meant to be used as a reference only. In case of any contradiction or incompatibility between the Hebrew and the English versions, the Hebrew version shall prevail.

LEGAL DISCLAIMER

This presentation regarding Isracard Ltd. ("the Company") and its consolidated companies (jointly: "the Group") is intended for the sake of summary and convenience and does not encompass all the information of the Group and the activity thereof nor the need to review the Company's reports for 2020, the first and second quarters of 2021 and the Company's current immediate reports ("the Reports"), and should be reviewed alongside the Reports. The information incorporated in this presentation may include data presented by a different manner or editing or segmentation than such are presented in the Reports.

The presentation does not constitute any offer or invitation to purchase securities of the Company, and the stated herein does not constitute any recommendation or opinion or replacement of the investor's discretion.

This presentation includes planes, targets, estimations, assessments and other information referring to future events, inter alia, information of future actions and liquidity. Such aforesaid information constitutes forward-looking information, as such is defined in the Securities Law, 5728-1968, and may not materialize, in its entirety or in part, or may materialize fundamentally different than forecasted.

This forward-looking information is based on the Company's subjective assessment, on the basis of facts and data regarding the current position of the Group's businesses as such are known to the Company as of the date of preparation of this presentation, as well as on macro-economic facts and data, on which the Company relies without being able to verify them, inter alia, reports and publications made by various external entities, such as: the Bank of Israel and agents operating in the payments market (including credit card companies and other acquirers).

Materialization or lack thereof of the forward-looking information shall be affected, inter alia, by developments in the payments and credit market in Israel or outside of Israel, by changes in the Group's working plan, by changes in market terms and external entities which affect the Group's activity, by consumers behavior in Israel and the world in general, by the presence or absence of different resources available to the Group, by the actions of entities and agents in the payments and credit markets in Israel or outside of Israel, by decisions made by various international entities and organizations with which the Group engages or by which the Group is influenced, by changes in volumes of activity and the number of holders of cards of the Group, including regulatory changes, accounting changes and taxation law changes, changes in the terms of competition, technological developments, economic changes, changes in terms of financing and the materialization of all or some of the risk factors characterizing the Group's activity. Moreover, it may be affected by the uncertainty surrounding the duration, the impact and the direct and indirect effects of the Coronavirus pandemic on the market position, the Group's costumers, and the various fields of activity in which the Group operates.

The Company does not undertake to update or change any such assessment or information such that they reflect events or circumstances to occur subsequent to the date of preparation of this presentation.

Isracard Group – 30.6.2021

Isracard Group – Highlights 30.6.2021

Improvement in economic conditions – An increase in credit card transaction volumes.

Maintaining Consumer Credit Portfolio of ~ NIS 4B. Increase in demand for consumer credit during the second quarter.

The Launch of Apple Pay digital wallet in Israel scales up the use of credit cards as a leading payment method.

Launch of insurance activity in Q4/2021.

Executing Isracard's growth strategy of investment and funding through Isracard X:

• Examining an increase in holdings in a Rent-Payments Fintech.
• Exploring a collaboration to form a venture in the field of Goods Financing.

Engaged with BCG International Consulting Company, started a strategic process of sharpening the group's business development and growth engines.

Isracard Group – Overview - 30.6.2021

Increase in Profit along with early stages of market recovery post pandemic crisis

Transaction Volumes

Maintaining a Consistence Growth in Transaction Volumes, also Vs 2019

Credit Portfolio Stability in portfolio along with Increase in demand for consumer credit during Q2/2021

High Coverage Ratios

Update in Allowance for Credit Losses

Efficiency

• Maintaining Operational Efficiency Ratios along with the implementation of the Efficiency Plan
• Sale of Isracard Building generated material capital gain*

Dividend

Dividend declaration in the amount of 27.8M NIS of company's 2020 net profit

Credit card Transaction Volumes in Israel(1)

Isracard's transaction volumes Vs credit card market transaction volumes(2)

• Isracard is maintaining leading market share in Q2.2021.
• 8.4% increase in transaction volumes from credit cards issued by the group in the H1/2021 compared with the same period in 2019, pre-pandemic.

Main Financial Data (Million NIS)

* Increase of ~12% in expenses (excluding provision for credit losses) in H1/2021 compared with the same period last year, while transaction volumes from credit cards issued by the group grow in 16%

Consumer Credit(1) (NIS Millions)

Credit Portfolio

Modified our technological & organizational infrastructure in order to execute the company's plans in consumers' credit segment.

9.2%

Average annual interest rate on consumer credit portfolio as of 30.6.2021.

Deferred Loans

Deferred loan repayments, in accordance with Bank of Israel Covid-19 framework, as of 30.6.2021, amounted to an insignificant amount.

As of May 2021 till July 2021 a gradual recovery was felt in demand for Consumer Credit, along with an increase in Consumer Credit Reserves (2)

(1) Credit not under bank guarantee (excluding purchases) (2) Includes credit to acquire vehicle amounting to NIS 170 Million as of 30.6.2021

Commercial Credit (NIS Millions)

Provision for Credit Losses (Millions NIS)

Q2.2021

• A decrease in Collective Allowance Ratio, for the 1 st time since beginning of pandemic.
• Maintaining High Coverage Ratios.

(59%)

Decrease in total writtenoffs debts collected compared with H1/2020.

Expenses (Excluding provision for Credit losses) - (Million NIS)

Total Expenses

(Excluding provision for credit losses)

; Despite a one-time decrease in expenses in Q2/2020 as a result of Covid-19 pandemic and as a response to the decline in income. Expenses rate (excluding provision for credit losses) in H1/2021 grew up 12% in compare to the same period last year and relatively to an increase of 16% in transaction volumes from credit cards issued by the Group.

Continued implementation of the Efficiency Plan to reduce group's workforce as announced during the end of 2020.

Capital Adequacy Ratio (as of June 30, 2021)

Financing Resources Balances(1) – Banks and Others As of June 30, 2021 (Million NIS)

Diversification of lines of credit enabled the Company redundancy in liquidity levels during the pandemic

• In 2020 the group expanded and diversified finance resources, updated agreements and signed new lines of credit agreements in a total amount of NIS 2.5 Billion. The group proactively lowered lines of credit from a former parent company in a similar amount funded by other banks.
• 24% decrease in financial expenses in H1/2021 in compare to H1/2020, inter alia, due to diversification of resources and creating a competitive climate among the funding sources.

Receivables due to credit card activity – main asset in the Balance Sheet (Million NIS)

The growth in receivables due to credit card activity is mainly as a result of increase in credit card transaction volumes during Q2/2021 compared with credit card transaction volumes during Q4/2020 against the backdrop of market recovery post pandemic crisis

Isracard Group – Wrapping Up – H1.2021

Engaged with BCG International Consulting Company, started a strategic process of sharpening the group's business development and growth engines

Mr. Ran Oz will step into his role as CEO in the following months

Net Income of NIS 113 M, ROE of *18.8% in the quarter

Dividend in the amount of approx. NIS 27.8 M reflecting 30% of 2020 net profit

An increase in transaction volume from credit cards issued by the group while maintaining highest market share in the sector

Maintaining customer's credit balances during pandemic. An increase in demand for consumer credit in Q2/2021.

For the first time since the beginning of pandemic, a decrease in Collective Allowance Ratio, in the Q2/2021 along with High Coverage Ratio enabling going forward flexibility

The efficiency plan is being carried out

Exploring collaborations and investments through the Isracard X

Appendices

Statement of Profit and Loss

Million NIS	4-6.2021	4-6.2020	1-6.2021	1-6.2020	2020**		2019**
Income
Income from merchants, net	299	245	569	527	1,079		1,191
Income from credit card holders	159	115	294	253	527		(1) 656	[673]
Interest income, net	107	109	210	218	433		376
other incomes (expenses)	* -	8	(1)	1	13		15
Total income	565	477	1,072	999	2,052		2,238	[2,255]
Expenses
Provision for credit losses	(7)	66	5	168	247		168
Operational expenses	206	157	411	358	(3,4) 750	[844]	(2) 812	[850]
Sales and marketing expenses	120	102	233	223	(4) 486	[503]	(2) 479	[498]
General and Administrative expenses	25	19	53	43	(4) 94	[97]	(2) 101	[112]
Payments to banks	65	45	117	106	223		283 (1)	[300]
Total expenses	409	389	819	898	1,800	[1,914]	1,843	[1,928]
Profit before taxes	156	88	253	101	252	[138]	395	[327]
Provision for taxes on profit	45	25	69	31	76 (3,4)	[50]	103 (2)	[87]
Company share in profit of associates	2	1	3	4	5		4
Net Profit	113	64	187	74	181	]93[	296	]244[

* Amount less than NIS 0.5 million

** [as presented in the group's financial statements]

(1) Pursuant to the application of the Shtrum Law and the settlement with Bank Hapoalim, certain fees from the bank's customers are not presented as of the settlement's date (February 1, 2019) as income, and accordingly, the bank's share thereof is not presented. Such fees amounted to a total of approx. NIS 17 Million during January 2019.

(2) Net of bonus granted to the Company's employees due to separation from Bank Hapoalim in the amount of approx. NIS 68 Million (NIS 52 Million after taxes) in 2019.

(3) Net of a one-time expense in the amount of NIS 69 Million (NIS 53 Million after taxes) due to termination of a technological project – customer & credit management system in 2020.

(4) Net of a one-time expense in the amount of NIS 45 Million (approx. – NIS 35 Million after tax) due to efficiency plan including reduction in workforce (voluntary retirement) in 2020.

Balance Sheet as of June 30, 2021

	30.6.2021	30.6.2020	31.12.2020
Assets
Cash and deposits in banks	154	115	125
Receivables due to credit card activity	24,534	22,235	23,180
Allowance to credit losses	(351)	(377)	(382)
Receivables due to credit card activity, net	24,183	21,858	22,798
Securities	67	64	69
Investments in associated companies	33	15	17
Buildings and equipment	328	397	363
Other assets	492	561	545
Assets held for sale	*68	-	-
Total assets	25,325	23,010	23,917
Liabilities
Credit from banks and others	4,723	4,448	4,296
Creditors due to credit card activity	16,551	14,495	15,630
Tradeable bonds	720	960	840
Other liabilities	683	686	705
Total liabilities	22,677	20,589	21,471
Equity attributable to Company shareholders	2,648	2,421	2,446
Total Liabilities and Equity	25,325	23,010	23,917

* According to company's estimations, estimated profit from sale, less expenses and after tax, as expected to appear in company's financial statement, upon delivery of the holding in the property, is expected to range from 38 to 45 million NIS.

Thank you Financial Reports for June 30, 2021