Top Israel banks post soaring profits off loan holders’ high interest rates amid challenging war period

Israel Discount Bank posts record results for the three months ending in June, as the country’s third-largest lender continues to cash in on high interest rates and fees paid by mortgage and loan holders during the challenging war period.

In the April to June period, Discount Bank saw its profit jump 7% relative to the same quarter in 2024, to NIS 1.12 billion ($331 million). Discount says the “strong performance was largely driven by an increase in revenues,” fueled by a rise in net interest and fee income.

Discount’s net interest income in the reported quarter soared by 10% from the first three months of 2025 and by 1.5% year-on-year. Meanwhile, fee income grew by 1.5% quarter-on-quarter and by 10.3% year-on-year.

The country’s largest banks this week reported another quarter of hefty profits that defy economic challenges of local businesses and households that grapple with high mortgage and lending rates charged by the lenders amid the 22-month-long war with the Hamas terror group.

Bank Leumi, one of Israel’s two largest banks, saw its second-quarter profit surge 15% year-on-year, from NIS 2.3 billion ($680 million) to NIS 2.6 billion ($770 million), as net interest income grew by 3.7% bolstered by growth in the credit provided to households and corporate customers.

Bank Hapoalim, the country’s largest bank, reported a profit of NIS 2.5 billion ($740 million) in the second quarter of 2025, up 14% year-on-year, as the lender benefited from an increase in financing income and fees, alongside strong credit growth.