Ladies and gentlemen, thank you for standing by. Welcome to the Israel Discount Bank fourth quarter and full year 2022 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the call, please press star zero. With us on the line today are Mr. Uri Levin, CEO of Discount Bank, Mr. Barak Nardi, and Mr. Yossi Beressi. As a reminder, this conference is being recorded March 13th, 2023. If you have not yet done so, please access the presentation on the bank's website investors.discountbank.co.il. I would like to remind everyone that forward-looking statements for the respected company's business, financial condition, and results of its operations are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. Such forward-looking statements include, but are not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, and the effect of the company's accounting policies, as well as certain other risk factors, which are detailed from time to time in the company's filings with the various securities authorities. I would now like to hand over the call to Mr. Gad Barlev, Head of Investor Relations. Mr. Barlev, would you like to begin? Thank you. Good afternoon, Welcome to Discount Bank's 2022 annual financial report conference call. Participating in today's call are Uri Levin, CEO, Barak Nardi, CFO, and Yossi Beressi, Chief Accountant. We will start with opening remarks by the CEO, Mr. Uri Levin, followed by review of the financial results and strategic highlights by Mr. Barak Nardi, and we'll then open it up for questions. I will now hand over to Uri. Thank you all for joining us today. I'm very proud to present our 2022 results. There's a reason to be proud. Discount Group achieved extremely strong results this year. Net income of ILS 3.5 billion, return of equity of 15.1%, and cost-income ratio of 55.8%. These are record results for the group. The results demonstrate the extremely strong underlying core performance with 33% net interest income growth and responsible credit growth of 13%. Our total equity also passed the ILS 25 billion mark. However, this is not a story of a successful single year. Our story is a story of a successful journey of consistent improvement and execution on our strategy. A journey that has transformed the bank and delivered superb financial results. Our net income grew from ILS 500 million in 2014 to ILS 3.5 billion today, while improving the return on equity from around 4% then to over 15% today, and reducing cost-income ratio from 87% to less than 56% today. We have set challenging targets for 2025 as part of our strategic program. Our strong execution capabilities, combined with favorable macro conditions, enabled us to achieve this long-term target three years ahead of time. We believe that 2022 results, more than the numbers themselves, demonstrate the strength of the Discount Group. They demonstrate our ability to deliver superior long-term value and superior growth. They demonstrate our responsible approach and robust credit portfolio and risk management platform. They demonstrate our strong management capabilities that led us in successfully managing 2022 challenges in the areas of capital, balance sheet, liquidity, credit, and many more, thanks to the challenging year. It demonstrate our strong strategic execution capabilities and value-creating approach that delivers superior value to our clients and to our shareholders. It demonstrate our position as challengers to the Israeli banking system, transforming both traditional banking and the competition to banks in Israel. We believe we have substantial unique advantages. We have higher potential, mainly due to our strategic positioning. An innovative medium-sized bank is large enough to make disruption, but small enough to benefit from it. We also have great strategic execution platform that enable us to change the bank while running it and to continuously improve it for the benefit of our clients and for the benefit of our shareholders. We have a management culture of leading responsible long-term value to our shareholders, always challenging and striving to be the best. All this give us high confidence in our future. We believe that our improvement potential, our strong changing platform, and managerial approach will support our future journey and will support our ability to deliver superior value over time. However, the strong results do come with a background of global economic slowdown and also an internal Israeli crisis. The Israeli economy fundamentals are strong, and the expectation is for the economic growth to continue in 2023, but at a much lower pace. As the rising interest rate is cooling down the economic activity. Labor market is still strong and expected to remain relatively resilient, although slight increase in unemployment in recent data is already apparent. Inflation is expected to remain high, but on a downward direction starting the mid of 2023. In addition, the Israeli internal conflict also increases the risk of the Israeli economy. We are fully ready to face the challenges of 2023. This is reflected in our Q4 results with higher group provisioning of credit losses, anticipating higher losses in the near future. Taking this risk into consideration, we are still highly positive regarding 2023. The bank is strong, the Israeli economy is strong, significantly stronger than most of the world's economies, with higher expected GDP in 2023 and substantially lower debt to GDP ratio. The macro conditions are also still favorable to banks, with interest rate positive impact overcoming potentially credit losses impact and other risks. Lastly, we see early signs for efforts to reach a solution around the internal Israeli conflict. I am positive that such solution would allow the Israeli economy to continue in its successful path. I would like to thank all of you for your trust and to continue and promise you that we'll continue to work hard to deliver superior value over time. I will now hand over the floor to Barak to share the rest of the presentation. Thank you, Uri. Good afternoon, everyone. I hope you are well. I will open my part of the presentation with an overview of the financial results and then discuss the successful execution of our strategy. Starting with slide eight, I would like to elaborate a bit on the financial highlights of the fourth quarter and the year. Our ILS 3.5 billion net income and 15.1% ROE for 2022 was largely driven by revenue increase from core banking activity, supported with steep rising of the interest rate. NII increased by 33% for the year and by 61% in the quarter versus the parallel quarter in 2021. This material revenue growth drove an improvement in our cost-income ratio that reached 55.8% on a year basis and 53.8% in the fourth quarter. Credit growth slowed down in the fourth quarter, aligned with lower demand we are observing. Nevertheless, we remain focused on our targeted segments, where we believe we have the greatest potential to outgrow the market and which can bring the highest contribution to the bank and our shareholders. At the same time, we remain focused on the quality of our lending. In the fourth quarter, we have recorded ILS 430 million of credit loss expense, which is about 38 basis points of the average credit balance and is largely related to increase in group-based provisions, which reflects worsening macro assumptions. Other credit metrics continue to remain solid. Lastly, this is another quarter where we have announced on 20% dividend distribution, totaled about ILS 187 million. On slide nine, you can see our credit growth. As mentioned before, in the fourth quarter, credit growth slowed down. We grew by about 1.8%, which was evident across all segments except large corporates. Nevertheless, compared with fourth quarter of 2021, we grew by 13%, focusing on our targeted segments. Mortgages grew by 21% year-on-year and are now comprising 26.7% of our loan book, compared to around 20% three years ago. Credit to medium enterprises grew by 16.6% year-on-year. Looking ahead, we continue focusing on sustainable, profitable, and responsible lending opportunities. On slide 10, you can see a very good demonstration of the strength of our core business and the impact of higher interest rates. The average interest rate in the fourth quarter climbed to 2.92% compared to about 1.5% in previous quarter and close to zero in the first quarter of the year. As a result, and in line with our anticipation, the NII in 2022 grew by 33% versus last year to about ILS 8.7 billion. In addition, fee income grew by about 10%. Total income grew by 23.3% in 2022 compared to last year. As you can see from the chart on the right-hand side, we continue growing in what we define as financing income from current operation. This is the income from our core banking activities, our bread and butter. These numbers exclude the impact of few items such CPI derivatives and fair value adjustments. The income from regular financing activity grew this quarter by around 50% versus Q4 2021, and NIM increased to 2.98%. Q4 high level of NII is creating a strong basis for 2023, even before taking into account the market expectations for further interest rate increases that will have a positive impact on our NII. Moving to slide 11. The expenses grew by 5.2% this year, mostly because of growth in other expenses, largely due to revenue-related expenses linked to increased activity at Cal, and other operational and compensation-related expenses in IDB New York. Salary expenses remained restrained with a 9.2% increase, substantially lower than 2022 inflation rates. Due to the exceptional increase in revenues, which materially outpaced the growth in expenses, as you can see on the right-hand chart, and evidenced by positive jaws of 18.2%, cost-income ratio continue improving, reaching 55.8% for 2022 and 53.8% for the fourth quarter, bringing us to our strategic target of below 55%. On slide 12, you can see the evolution of credit loss expenses. This quarter, we are still not observing a material deterioration in specific borrowers condition, as evidenced by still moderate low specific basis provision. We continue to increase full basis provisions to reflect growth in macro assumptions, in particular, the increasing interest rates. Overall, credit loss expense grew to 38 basis points in the fourth quarter, and the cumulative credit loss expense for 2022 was 18 basis points. On the next slide, you can see additional asset quality metrics. Allowance for loan loss provisions from total credits remained at 1.31%, the same as previous quarters. Non-performing loans is stable with NPL from total loans remaining low. NPL coverage is also very strong, as the loan loss provision covers non-performing loans by almost twice. These indicators reflect the solid quality of our loan book and our conservative underwriting. Moving to slide 14, I would like to refer briefly to the future separation of Cal from Discount. According to the regulation, Discount must divest its Cal holdings by January 26th or by January 27th in case of an IPO. Although we have at least three years to complete the separation, we already started preparing for it. Cal is presenting record high results in 2022, with a net profit of ILS 309 million and ROE of 14.3%. In light of the strong results of Discount Group, Cal attributes only 5.4% to the group's net profit. As you can see in the table presented in this slide, the future separation of Cal is expected to have a limited impact on Discount ongoing profitability. Let's move on to the strategic review, starting with slide 15. As we have laid out in the past, we are fully focused on being the best financial institution for our customers and delivering superior value to shareholders over time. I'm very happy to say that thanks to the very successful execution of our strategy, combined with a supportive macro environment, we have reached our 2020-2025 strategic targets. Over the next few slides, I will present how the key pillars of our strategy have gotten us to where we are today and will continue driving us to achieve our goals. On slide 16, we discuss the first pillar of our strategy, which is accelerated evolution of traditional banking, where we are constantly driving profitability and gaining market share. I will briefly touch on the key drivers behind it. The first driver is a significant credit expansion, mainly in targeted focus areas. As you can see on the upper left side of the slide, our total credit grew significantly over the last three years, with our focus areas of mortgages and medium enterprises growing 21% and 16.6% respectively in 2022. Another key driver for us is to increase our customer base. Discount demonstrates its competitive approach by the steps it takes to offer out-of-the-box value propositions to our customers. The combination of this approach and the introduction of Switch with a Click by the regulator allows us to acquire new customers quickly and easily. The customers are reacting, in 2022, we recruited through Switch with a Click almost two customers for every one that left the bank. The next key driver is increasing efficiency through higher productivity. The combination of continued revenue growth along with strict cost management led to a sharp increase in income per employee into a substantial improvement in our efficiency ratio from 67.5% in 2020 to 55% in 2022. The last driver within our traditional banking strategic pillar that I would like to discuss is customer satisfaction. Being a customer-centric organization, we set the goal to be the leading bank in NPS among the five large Israeli banks. In 2022, we achieved a score of 7%, compared with an average of -6% for our peers, and we're ranked as number one among the five big banks. We have reached it by making wide and significant efforts across all divisions of the bank that led to a fundamental change in our work processes and principle of service. In addition to the drivers from the traditional banking, we also continue to create value through disruptive innovation, as presented on slide 17. Discount's unique positioning creates a competitive advantage as a player that is large enough to make an impact and yet small enough not to fear cannibalization. Less than two years after PayBox came out, Discount is launching Greenlend, a fintech company that will offer digital credit to clients of all banks. Both PayBox and Greenlend are based on the key principles we have set for disruptive initiatives. A, operated outside the bank as separated and independent companies. B, collaborating with external partners. C, full mandate to compete all banks, including Discount. D, focusing on substantial value creation. Moving to slide 18 to talk about PayBox, that is on a mission to become Israel's leading wallet for managing money outside the bank. In its second year as a standalone entity, PayBox presents a substantial growth in all the key business drivers, reaching annual transaction volume of ILS 5 billion with two million linked accounts and around 1.3 million active quarterly users. PayBox is already challenging the traditional banks. Its recently published deposit proposal is a good example for it. Moving to slide 19 to present Greenlend, a fintech company for fast and fully digital credit solution that Discount is founding in partnership with ezbob, an English-based technology company. Greenlend will focus on the consumer and small business segment and will offer customized and embedded finance solutions distributed through third parties to customers of all banks. The launch of Greenlend is another important step in the implementation of the Discount Group strategy to stimulate competition in the banking system through the establishment of ventures that will operate as independent companies and compete with the entire banking system, including Discount Bank itself. The last pillar of our strategy I would like to highlight on slide 20 is maximizing the group value with the goal of empowering each of our subsidiaries and leveraging the synergies between them. As you can see in this slide, our subsidiaries achieved very strong results in 2022, and each of them has ambitious plans for the future. To summarize, on slide 21, I would like to emphasize the key takeaways from this quarter results. First, we delivered record 2022 results with ROE of 15.1% and cost-income ratio of 55.8%, and we reached our 2025 strategic targets. Second, we generated a substantial revenue increase from core banking activity, driven both by our credit growth and by the increase in interest rates. This creates a very strong basis for our future growth as well. Third, we present a responsible credit growth in line with the current macro conditions while remaining focused on our targeted segment. Fourth, we launched Greenlend, a customized digital fintech credit solution, and we continue our journey to generate substantial value through disruptive initiatives. Lastly, given the very strong performance of Discount, the future separation of Cal is expected to have a very limited impact on our ongoing profitability. With this, I will finish the overview and would like to open to Q&A. Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Chris Reimer of Barclays. Please go ahead. Hi. Thanks for taking my questions, and congratulations on the strong results. Regarding asset quality, is there any segment in your portfolio that you see most at risk when it comes to repaying their loans? Overall, as I mentioned before, we don't see deterioration in our portfolio, and we feel very comfortable with it. The credit metrics look good. There are some segments when I'm looking, you know, not specifically to Discount, and when I'm looking, you know, generally, I think the high-tech sector and maybe construction sector and maybe small businesses could be more harmed than others given the current market conditions. So far, we don't see any evidence of a substantial deterioration in our portfolio. Got it. Just touching on the global market situation, it seems that investors are concerned about the impact of the failure of Silicon Valley Bank. Do you have any general thoughts you could share around the bank's collapse? Well, we would be modest in trying to share something about SVB with so many professionals looking at it. I would say that clearly SVB is a very unique bank with a unique balance sheet and unique client base, and I think that this has definitely led to the current situation, and I think it's important to separate this bank from others. Other than that, I think we will have to wait and see that the market relaxes. I think what gives us a lot of comfort is the reaction of Treasury and of the Fed seems to be that the reaction is strong, and if more will have to be done, it seems like that will be the case. Speaking about ourselves, I think clearly, the Israeli banking system is in a very different situation where, I think both because of Bank of Israel, because of our conservative approach and because of the market structure, the robustness of the banks is extremely strong. Actually, the crisis has only made the banks more stable and more robust. Got it. Thanks for that. That's helpful. That's it for me. If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. The next question is from Michal Gordon of Psagot. Please go ahead. Hi, good afternoon. Congratulations from me too to your very strong year. Just want to add on the question on what's going on globally. I mean, obviously, the mismatch on asset liability management and the huge losses on AFS and HTM are significant. You also have losses on your AFS around ILS 2.5 billion. I was just wondering, could you talk about your exposure on, you know, a potential mismatch on duration between the credit and deposit side? Can you talk about, you know, your huge asset losses that potentially, if we are forced to buy in and how does that work into liquidity? Just to make sure that, you know, I understand that, you know, this kind is definitely significantly different than obviously what we're talking about in the U.S. Thanks. Micha, thank you for your question. I will start by the bottom line, and I think it's a non-issue. Again, when you look at the mark-to-market value, I think you probably need to look at both sides. Of the balance sheet where, yes, we do have, ILS 2 billion in our HTM, which is a very, you know, a very modest number that has no significant impact over the bank. We do not calculate the value of the gains that we have from our fixed liabilities, the current account, fixed deposits, and the like, which way surpasses this value. First, it's a non-issue because of the size, a completely different balance sheet, and there shouldn't be. There is no implication to that, to the ongoing, work of the bank. Is there a mismatch between funding, financing and is there a mismatch between short, you know, funding and the credit side, or is that not, you know, as real significant? Michal, actually, you know, I have, you know, I have some issues even discussing that in that relation. The comparison is not a comparison that should be made. This is a completely different situation. You're speaking about a size that is almost of no impact to the bank versus, you know, something that has led to a bank collapse. Of course there are mismatches. Of course, we manage the asset liability as any bank does. Of course, we manage interest rate risk, and of course we manage all of those. Of course, we manage liquidity risk. The bank has ample liquidity. The bank has, you know, t he bank is well equipped to any crisis along the road. The likelihood of something that even is similar to that is, does not exist. Happy to go into the specific numbers, Michal, but I think again, it's the magnitude that we need to talk about. This is a story. It's not only the Discount Bank story. I think it's the story about the entire Israeli banking system and most of the large banks in the system. It's a completely different story. I don't disagree. It's questions that are being asked towards those issues. It's worthwhile raising them. Do you think there's any risk to IDB New York or is it all upside potential for potential clients moving away from similar pulses? Actually what we see is. First, Michal, just adding to what you said, we're happy to show the numbers, but I think at the end of the day, the number that you have is the ILS 2 billion of the HTM, and you can just then wait and look at that and see that it's not significant. Happy to share any more information if you would like. As for IDB New York, actually what we do see in IDB New York, being in a special position as the only Israeli-owned bank in the U.S., we see a flight of clients into the bank coming from Silicon Valley Bank, coming from Signature Bank, clients with deposits who want to open accounts with us. We do believe that that actually be good news for IDB New York, allowing us to get more deposits, more liquidity, clearly very important these days. Thank you very much. Thank you, Michal. There are no further questions at this time. Thank you. This concludes the Israel Discount Bank fourth quarter and full year 2022 results conference call. Thank you for your participation. You may go ahead and disconnect.