IDB New York, which is wholly owned by Discount Bank, publishes the draft financial statements (Call report) for June 30, 2020 to summarize the results of the second quarter that the bank ends with a net profit of $ 21 million and a return on equity of 7.7%.
The bank continued to implement its five-year strategy while managing the implications of the corona crisis and a smooth transition to a remote work model. During this challenging period, the Bank provided its customers with easy loans. These concessions were granted under the Government Wage Protection Program, in accordance with the Economic Assistance to the American Corona Crisis Act. This program offers loans to businesses that will commit to continuing to employ their employees, which in some circumstances become a grant.
The corona crisis continued to affect the Bank’s results in the second quarter of 2020. At the same time, the Bank maintained a solid capital, with a Tier 1 equity ratio of 14.7% and high liquidity.
Demand for deposits continued during the quarter (an increase of 3.5% compared to the previous quarter and of 5.7% compared to the corresponding quarter last year). On the other hand, there was low demand for credit, a decrease of 4.4% compared to the previous quarter, but an increase of 3.7% compared to the corresponding quarter last year, trends that reflect the impact of the crisis.
These effects, in addition to the low interest rate environment, led to a significant decrease in interest income, which was partially offset by a decrease in the cost of raising deposits. Total net interest income was $ 62.2 million, up 5.1% from the previous quarter and down 1.9% from the same quarter last year.
Non-interest income amounted to $ 10.9 million, compared to $ 15.7 million in the same quarter last year, mainly due to a decrease in profits from trading activities and derivative activities of customers.
Expenses for credit losses amounted to $ 2.5 million, which is 0.15% of the average credit balance, compared to $ 15 million in the previous quarter and $ 0.6 million in the corresponding quarter. The main reason for the decrease compared to the previous quarter is that in the first quarter a high group provision was recorded against the background of the crisis.