UPDATE 1-Israel Discount Bank Q4 profit, interest income jump

(Adds detail, share reaction, analyst comment) By Steven Scheer JERUSALEM, March 13 (Reuters) - Israel Discount Bank reported a 78% jump in fourth-quarter profit, with higher interest rates boosting financing income to more than offset higher loan default provisions. Israel's fourth-largest bank said on Monday it earned a net 939 million shekels ($261 million) in the October-December quarter, up from 529 million a year earlier. Net interest income rose 51% to 2.54 billion shekels, helped by Bank of Israel rate hikes to fight inflation. Credit loss expenses for the quarter were 230 million shekels compared with income from provisions of 10 million during the same period the previous year. With inflation at a 2008 high of 5.4%, the Bank of Israel has aggressively raised its benchmark interest rate to 4.25% from 0.1% last April. Discount said credit growth was 13% in the fourth quarter, led by mortgages, while its non-performing loans ratio of total loans was stable at 0.67%. The bank's ratio of common equity Tier-1 capital to risk components capital rose to 10.25% by the end of 2022 from 10.14% in 2021. Discount said it would pay a quarterly dividend of 187 million shekels, or 20% of quarterly net income. Its shares rose 2.4% in early trading in Tel Aviv to 18.12 shekels. Barclays analyst Tavy Rosner called the results "solid" and believes there is 57% upside to his 29 shekel price target. Last week, larger rival Hapoalim reported a near doubling of fourth-quarter net profit to 1.75 billion shekels.

($1 = 3.5921 shekels) (Reporting by Steven Scheer; editing by Ari Rabinovitch and Jason Neely)

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