JERUSALEM, Nov 27 Reuters Israel Discount Bank on Monday reported an 8.5 drop in thirdquarter profit and temporarily slashed its dividend payout due to the fallout from Israel39;s war with Hamas militants.

Discount39;s quarterly net profit slipped to 817 million shekels 220 million from 893 million a year earlier, while net interest income boosted by aggressive Bank of Israel interest rate hikes aimed at fighting inflation grew 19 to 2.7 billion shekels.

But its credit loss expenses soared to 596 million shekels from 106 million a year earlier to reflect expectations for slowdown in economy due to the war in Gaza, it said.

Israel39;s banking regulator had asked banks to bring forward higher loan loss provisions to their thirdquarter results despite the war breaking out at the start of the fourth quarter. The central bank also told banks to remain conservative when issuing dividends, and to provide credit while the country was at war and the economy was set to slow.

Discount, Israel39;s fourthlargest bank, said it would pay a dividend of 123 million shekels, or 15 of thirdquarter net income, down from 30 the last two quarters.

CEO Avi Levi said trimming the dividend demonstrates a conscientious approach to meeting the credit needs essential for sustaining both small and large businesses, many of whom are our clients.

It39;s crucial to underscore that we entered this wartime period with a robust and secure financial position, boasting high capital adequacy and…