The Supervisor of Banks: 671-1 - boi.org.il · 16. In quarterly and annual financial statements for 2011, a banking corporation may continue measuring fair value by using a representative

The Supervisor of Banks: Public Reporting Directives [5](1/12)

Transitional Provisions (2011) Page 671-1

Transitional Provisions for the year 2011

With regard to the Report of the Directors, the Management Review, the Certification of

Disclosure, the Report of the Directors and Management on their Responsibility for the

Annual Statement and the Financial Statements of Banking Corporations and Credit Card

Companies, the following specific transitional provisions have been established. It is

nonetheless recommended to apply the regular format of the Directives with regard to reports

issued after publication of these provisions.

It is hereby clarified that the transitional provisions set out below will apply with the

necessary changes with regard to the quarterly report of banking corporations and credit card

companies published in 2012.

A. Annual Report of a Banking Corporation

Temporary provision regarding implementation in the financial statements of banking

corporations and credit card companies for 2009 and thereafter of the disclosure

requirements set out in the Third Pillar of Basel II (pages 694 A-1-21)

1. Transitional Provisions are included in the body of the Temporary Provision.

Report of the Directors

2. Where data is required in the Report of the Directors, in respect of which transitional

provisions regarding the publication of data in the financial statements or the

management review have been set out, the same transitional provisions will also apply

to the publication of that data in the Report of the Directors.

Temporary provision regarding the description of the business of a banking

corporation and forward-looking information in the Report of the Directors

(pages 696-1-15)

3. Application should be made to the Supervisor of Banks to receive a pre-ruling in any

case where it is required, pursuant to paragraph 13(b) of the Schedule to the

Temporary Provision, to provide disclosure in the report to the public of a customer’s

name.

4. A banking corporation is entitled not to provide the disclosure required pursuant to

paragraph 26(d) and 26(e) of the Schedule to the Temporary Provision.

Report of the Directors

Measurement and disclosure of impaired debts, credit risk, and allowance for credit

losses

5 Wherever in the Report of the Directors for 2011 discussion or reference to the

balances of provisions for doubtful debts or problem debts for comparative periods

during 2010 is included, the discussion or reference shall also make reference to the

relevant proforma figures as at 31.12.2010 that were included in the Annual Report for

2010. It is hereby clarified that this transitional provision shall apply, with the required

changes, to the quarterly report of the banking corporation or credit card company

published in 2011.



Management Review

Exposure to changes in interest rates 6 A banking corporation is not required to classify a financial instrument as a compound

financial instrument, if it can reasonably reflect its interest rate exposure by disclosing

the periods remaining for repayment of cash flows in respect thereof. For example,

a banking corporation is not required to classify as a hybrid financial instrument,

a financial instrument which has significant embedded optional components that do

not have to be separated under Part A.1 of the Public Reporting Directives, if it can

reasonably reflect the interest rate exposure of this instrument by spreading the

transactions over the repayment dates, and for this purpose, it separates, in order to

disclose the exposure to changes in the rates of interest, the option component of these

instruments. In such a case, for the purposes of Appendix D, the bank shall account for

the option that has been separated and the host instrument as if they were independent

instruments, and shall make separate disclosure that shall make clear which

instruments were dealt with as stated, and if material, what the exposure of this

treatment was on the fair value and the effective duration in each linkage segment.

Certification regarding Disclosure, Report of the Board of Directors and Management

on Internal Control over Financial Reporting

7. Where the Supervisor of Banks has determined specific transitional provisions for a

banking corporation with respect to the implementation of Proper Conduct of Banking

Business Directive No. 305 - "Chief Accountant", the corporation should apply to the

Supervisor of Banks to receive instructions regarding the signature required on the

Certification and on the Report of the Board of Directors and Management on Internal

Control over Financial Reporting.

Financial Statements

Measurement and disclosure of impaired debts, credit risk and allowance for credit

losses

8. As of 1.1.2011, a banking corporation and a credit card company shall apply this

directive to all the debts and off-balance sheet credit instruments existing at that date.

Transitional adjustments resulting from the adoption of this directive as of 1.1.2011

shall be included directly in retained earnings in shareholders’ equity.

9. In order to apply this directive on 1.1.2011, a banking corporations and a credit card

company shall, inter alia:

a. Make an accounting write-off of any debt that, on 1.1.2011, meets the conditions

for an accounting write-off;

b. Classify by way of classification as special mention, substandard, or impaired, any

debt that, on 1.1.2011, meets the conditions for such classification;

notwithstanding the abovementioned, a banking corporation and credit card

company are not required to classify as impaired any debt that has been

restructured by way of a troubled debt restructuring, in which changes were made

to the terms of the debt prior to 1.1.07, as long as the debt is not impaired based

on the conditions set out in the restructuring agreement. If such debt has not been

classified as impaired, a banking corporations and a credit card company shall

consider the appropriate classification of such debt.

c. Cancel all interest income that has accrued and has not been paid in respect of any

debt, which, on 1.1.2011, meets the relevant conditions;



d. Adjust the balance of the allowance for credit losses in respect of credit to the

public and in respect of off-balance sheet credit instruments as at 1.1.2011, to the

requirements of this directive, including requirements for determining the

allowance and requirements for documentation.

e. Examine the need to adjust the balance of current and deferred taxes receivable

and payable as at 1.1.2011.

10 For the purposes of applying this directive on 1.1.2011, banking corporations and

credit card companies shall, inter alia:

a. Include a note regarding the method of initial adoption of this directive. For this

purpose, inter alia, disclosure shall be made of the impact of the initial adoption of

this directive in the statement of changes in shareholders’ equity, and in a note on

the changes in the balance of the allowance for credit losses. In addition,

a banking corporation shall make disclosure in a note to the financial statements

regarding the changes in the recorded debt balance of the credit to the public,

changes in the balance of deferred taxes, and changes in any other balance sheet

item materially affected by initial implementation of the directive.

b. Herein attached in the Appendix is a sample format of the condensed balance

sheet and of the relevant part relating to the period of three months ended on

31.3.2011 in the condensed statement of changes in shareholders’ equity and in

the note of the changes in the balance of the allowance for credit losses.

A banking corporation shall make similar disclosure, with the necessary changes,

for other reporting periods required pursuant to the Public Reporting Directives.

c. Comparative figures shall be measured in the same manner in which they were

measured in the relevant statements that were published for those years.

In addition, disclosure shall be made of the relevant proforma figures as at

31.12.2010 included in the report as at 31.12.2010.

Impairment of assets

11. When a banking corporation has recognized a loss from impairment of a certain asset

before 1.7.07, and has classified the loss under “Profit from extraordinary activities,

after tax”, it shall continue classifying the updating of the provision for impairment of

the relevant asset under the same item in the statement of profit and loss.

Section 19 of the Public Reporting Directives – Fair Value Measurements 12 This section shall apply as of 1.1.2011.

13. This section shall be applied prospectively as at 1.1.2011, except in those cases stated

below. This section shall be applied retroactively for the following financial

instruments that are existing on 1.1.2011 (a limited format of retroactive application):

a. A position in a financial instrument traded in an active market and held by a

trader-broker or investment company under the scope of the AICPA Audit &

Accounting Guides for those industries, measured at fair value by using the

blockage factor prior to the initial implementation of this section.



b. A financial instrument measured at fair value at the date of initial recognition

under Section 1A of the Public Reporting Directives, by using the transaction

price in accordance with the provisions of Note 3 in Publication No. 02-03 of the

Emerging Issues Task Force (EITF) – “Issues Involved in Accounting for

Derivative Held for Trading Purposes and Contracts Involved in Energy Trading

and Risk Management Activities”, prior to the initial implementation of this

section.

c. A hybrid financial instrument measured at fair value at the date of initial

recognition under Section 1A of the Public Reporting Directives, by using the

transaction price in accordance with the provisions of this section (which were

added in accordance with Section 155 of the FASB – “Accounting Treatment of

Certain Hybrid Financial Instruments”) prior to the initial implementation of this

section.

14. At the date of initial application of this section on the financial instruments mentioned

in paragraphs 5.a. – c. above, the difference between the book balances and fair value

amounts of those instruments shall be recognized as an adjustment in respect of the

accumulated effect on the opening balance of retained earnings as at 1.1.2011, which

shall be shown separately. Disclosure requirements provided in generally accepted

accounting principles for a change in an accounting principle shall not be applied.

15 The disclosure requirements of this section (sub-sections 32-35 in section 19),

including the disclosure required only in annual reports, shall be implemented for the

first interim period of the financial year in which this section is initial implemented

(i.e., for the first quarter of 2011). There is no need to implement the disclosure

requirements in this section in financial statements for periods presented prior to the

initial implementation of this section.

Using a representative rate of exchange to measure the fair value of assets and liabilities

measured at fair value 16. In quarterly and annual financial statements for 2011, a banking corporation may

continue measuring fair value by using a representative rate of exchange.

A representative rate of exchange shall be deemed a Level 1 input.

Credit risk of a counterparty in calculating the fair value of financial instruments

17. Data to be used in calculating the fair value of financial instruments

In quarterly and annual financial statements for 2011, a banking corporation may

make the adjustments required in calculating the fair value of derivative instruments in

respect of the credit risk of a counterparty, as follows:

a. When there is sufficient liquid collateral in respect of the exposure securing the

derivative instrument at a high legal level of certainty, it is not required to perform

adjustments in respect of the credit quality of the counterparty.



b. When the exposure in respect of the counterparty on a consolidated basis is

material – the banking corporation is required to make reasonable efforts to find

indications from transaction in an active market as to the credit quality of the

counterparty (as distinguished from transactions of similar parties). The said

indications can be derived from, for example, prices of debt instruments of the

counterparty traded in an active market, and prices of credit derivatives, the basis

of which is the credit quality of the counterparty. In the event that there are no

such indications, a banking corporation may calculate the adjustments based on

internal ratings (such as estimates of expected rates of default, and rates of credit

loss in the event of default).

c. With regard to other counterparties – a banking corporation may perform the

above calculation of the adjustment on a group basis, by using a credit quality

measure according to groups of similar counterparties, for example, based on

internal ratings.

d. A banking corporation is required to check the reasonableness of the results

obtained under this section in relation to changes in margins in the market, and to

make the necessary adjustments, as applicable.

e. For this purpose, an exposure of more than 1% of the shareholders’ equity of the

banking corporation shall be deemed as material exposure on a consolidated basis.

18 Models to be used in calculating the fair value of financial instruments

In quarterly and annual financial statements for 2011, a banking corporation is not

required to use complex models that include different scenarios of potential exposure

in order to measure the credit-risk component included in the fair value of derivative

instruments.

Section 20 of the Public Reporting Directives – The Fair Value Option for Financial

Assets and Financial Liabilities

19 This section shall apply as of 1.1.2011. This section is not to be applied retroactively,

nor is the section to be applied by early adoption.

Implementation for eligible items existing at the inception date

20. At the date of initial application, a banking corporation may choose the fair value

option for eligible items existing at that date. The banking corporation shall allocate

the effect of the initial remeasurement at fair value as an adjustment in respect of the

cumulative effect for the opening balance of retained earnings.

21. The difference between the balances in the balance sheet and the fair value of eligible

items for which the fair value option has been adopted at the date of initial application

shall be removed from the balance sheet and included in the adjustment in respect of

the cumulative effect. These differences may include, inter alia:

a. Deferred costs, deferred fees, premiums, and discounts not yet deducted.

b. Valuation allowances (for example, allowances for credit losses).

c. Accrued interest that would be reported as part of the fair value of the eligible

item.


Transitional Provisions (2011) Page 671-5.1

22. A banking corporation that chooses the fair value option for items existing at the date

of initial application shall present the details listed below in its annual financial

statements and its first interim financial statements for the fiscal year in which the

application date occurred:

a. A table showing the following details by balance sheet item:

(1) The portion before tax of the adjustment in respect of the cumulative effect

amending retained earnings for items in that section;

(2) The fair value at the application date of eligible items for which the fair value

option was chosen, and the balances in the balance sheet of those items

immediately before choosing the fair value option.

b. The net effect of choosing the fair value option on deferred tax assets and

liabilities.

c. Management’s reasons for choosing the fair value option for each eligible item or

group of similar eligible items.

d. If the fair value option is chosen for part of the eligible items belonging to a group

of similar eligible items, but not for all of them:

(1) A description of these similar items and the reasons for the partial choice;

(2) Information enabling users to understand how the group of similar items is

connected to separate items in the balance sheet.

e. The amount of valuation allowances removed from the balance sheet, since they

were connected to items for which the fair value option was chosen.

Securities available for sale and securities held to maturity

23. Securities available for sale and securities held to maturity, which are held at the

application date, are eligible for the fair value option at that date. If the fair value

option is chosen for any of these securities at the application date, accrued unrealized

gains and losses at that date shall be included in the adjustment in respect of the

cumulative effect. Separate disclosure shall be made of the amount of unrealized gains

and losses that were reclassified from cumulative other comprehensive profit (for

securities available for sale), and of the amount of unrealized gains and losses not

previously recognized (for securities held to maturity). If Section 19 of the Public

Reporting Directives is adopted together with this section, any change in the recorded

fair value of an eligible item existing at the application date, deriving from the

implementation of the provisions in section 19 (such as, for securities available for

sale) shall be included in the adjustment in respect of the cumulative effect if the fair

value option was chosen for this eligible item.

24. If a banking corporation chooses the fair value option for a security held to maturity or

a security available for sale on the initial adoption of Section 20 of the Public

Reporting Directives, the said security shall be reported as a security held for trading

in accordance with Section 24 of the Public Reporting Directives, but the accounting

treatment on transfer to the ‘held-for-trading’ portfolio, provided in Section 24 of the

Public Reporting Directives shall not apply. The choice of the fair value option for an

existing security held to maturity on the initial adoption of Section 20 of the Public

Reporting Directives shall not cast doubt on the banking corporation’s intention to

hold other bonds to maturity in the future.



Certain International Financial Reporting Standards (IFRS)

General

25. On 31.12.09 and 26.7.10, Circulars Nos. H-2253-06 and H-2274-06 were published.

In these circulars, inter alia, certain International Financial Reporting Standards

(IFRS) were combined with the Public Reporting Directives. The directives

determined in accordance with these circulars shall apply as of 1.1.2011.

26. On the initial implementation of an International Financial Reporting Standard in

accordance with these directives, a banking corporation and a credit card company

(hereinafter: “a banking corporation”) shall act in accordance with the transitional

provisions established in the said International Financial Reporting Standard. This

includes the retroactive adjustment of comparative figures, if required by the

International Financial Reporting Standard.

27. As of 1.1.2011, a banking corporation shall routinely update the accounting treatment

of the matters addressed in this directive, in accordance with the implementation date

and transitional provisions established in new International Financial Reporting

Standards issued on these matters, and in accordance with the adoption principles in

Circular H-2253-06 and in accordance with the clarifications of the Supervisor of

Banks.

28. Changes in accounting treatment for existing items due to the adoption of International

Financial Reporting Standards:

With the implementation of International Financial Reporting Standard on a specific

subject, if, under the transitional provisions of the standard, it is required to apply it to

existing transactions, a banking corporation shall check what the appropriate

accounting treatment is, in accordance with the Standard, for all existing transactions

dealt with under this Standard. In situations where a banking corporation has reached

the conclusion that it shall materially change a previously implemented accounting

treatment for a particular subject, it shall carefully examine whether conditions

exist that justify a change in the accounting treatment, or if it is required to handle the

change as a correction of a mistake. A request shall be made to the Financial

Reporting Unit Manager in the Banking Supervision Department for preliminary

guidance in the event of any doubt, and whenever it is decided to make a correction of

a mistake.

International Financial Reporting Standard No. 3 – Business Combinations

29. Initial implementation of International Financial Reporting Standard No. 3 on

Business Combinations (hereinafter in this section: “the Standard”) in financial

statements as at 1.1.11 regarding business combinations and investments in equity-

based investee companies carried out prior to that date:

a. A banking corporation is allowed not to implement retroactively the standard on

business combinations and investments carried out prior to1.1.11. A banking

corporation choosing to act as stated shall implement the instructions set out in

sections C4 and C5 of International Financial Reporting Standard No. 1 on

“First-time Adoption of International Financial Reporting Standards”.



b. A banking corporation acting in accordance with paragraph a. above shall disclose

its accounting policy on the matter. Any such banking corporation that is of the

opinion that the initial implementation of the standard as at 1.1.11 creates a

change in its shareholders’ equity at that date shall apply to the Financial

Reporting Unit Manager for specific guidance.

30. Treatment of impairment of goodwill, intangible assets, and investments in associated

companies in financial statements for 2010, and in subsequent statements:

a. A banking corporation that acts in accordance with paragraph 29a. above shall, in

the financial statements for 2010, carry out a documented examination of

impairment as at 31.12.10, which meets the standards set out in International

Accounting Standard 36 - "Impairment of Assets" and International Accounting

Standard 28 - "Investments in Associates", as applicable, of the following assets

existing in the consolidated financial statements as at 31.12.10:

(1) Any goodwill;

(2) Any intangible asset created in a business combination, if applicable;

(3) Any associated company, the investment in which includes an amount

attributable to goodwill or an intangible asset created in acquiring an

investment.

b. It is clarified that this examination shall be carried out even if, at that date, there

are no indications of impairment of these assets.

c. For the purposes of performing the examination, and for the purposes of

performing later examinations of impairment of these existing assets, a banking

corporation shall ensure that it implements effective internal controls over

financial reporting of impairment of these existing assets that shall, inter alia,

comply with the principles established for new investments in Section 9.c.1.3 in

the Public Reporting Directives.

d. If, after the examination, it appears that, at 31.12.10, it is required to record an

impairment loss, the banking corporation shall record the impairment loss in the

statement of profit and loss for 2010.

International Accounting Standard 21 concerning the effects of changes in

foreign exchange rates – the treatment of cumulative translation differences as at

31.12.10 in respect of overseas offices

31. A banking corporation is allowed not to apply retroactively International Accounting

Standard 21 - "The Effects of Changes in Foreign Exchange Rates" on cumulative

translation differences on 31.12.10 included in shareholders’ equity for overseas

offices. A banking corporation choosing to act as aforesaid shall implement the said

guidelines as set out in Article D13 of International Financial Reporting Standard

No. 1 regarding " First-time Adoption of International Financial Reporting Standards",

and provide disclosure thereof.

International Accounting Standard 28 concerning investments in associates -

accounting policies on matters of core banking business of non-financial associated

companies



32. Notwithstanding that stated in International Accounting Standard 28 regarding

"Investments in Associates, a banking corporation is allowed, for 2011 and 2012, for

practical considerations, not to make adjustments in accounting policies referring to

issues relating to the core business of banking, which is implemented by a non-

financial associated company, which are required so that the associated company's

accounting policies in these matters shall be consistent with that of the banking

corporation. A banking corporation acting in accordance with this section shall

provide disclosure thereof.

33. For the purposes of section 24, it is clarified that:

a. This section shall apply only to a non-financial associated company preparing its

financial statements in accordance with International Financial Reporting

Standards.

b. Issues relating to the core business of banking - issues for which International

Financial Reporting Standards have not yet been adopted in the Public Reporting

Directives.

Format of statement of profit and loss for a banking corporation and adoption of

generally accepted accounting principles in banks in the United States on the

matter and the measurement of interest income 34. The instructions provided in the circular regarding the format of the statement of profit

and loss and adoption of generally accepted accounting principles in the United States

on the matter of the measurement of interest income, related to the statement of profit

and loss format, shall be implemented retroactively with effect from the report to the

public for the first quarter of 2012 and thereafter. The amendments provided in this

circular, which are related to the adoption of United States generally accepted

accounting principles on the matter of the measurement of interest income shall be

implemented with effect from 1.1.2014 and thereafter.

35. The statement of profit and loss for 2011 shall continue to be presented according to

our instructions that were in force prior to the amendments provided in this circular.

For convenience, Appendix C, herein attached, presents a summary of the main

provisions relating to the manner of presentation of the statement of profit and loss

and Appendix D presents a condensed statement of profit and loss format and main

notes, in the version that applies to the 2011 report (before the amendments stipulated

in this circular).

36. For the purposes of implementing the instruction regarding "measurement and

disclosure of impaired debts, credit risk and allowance for credit losses", a banking

corporation is required to cancel, from 1.1.12 and thereafter, accrued and unpaid

linkage differentials on the principal of an impaired debt in respect of debts classified

as impaired only from 1.1.12 and thereafter.

Transfers and servicing of financial assets and extinguishment of liabilities

37. Retained interests that have been retained in a securitization transaction (see section

6.2.2 of the Chaimovitz - Asher Committee Report):

A banking corporation that has implemented these provisions, transferred financial

assets in a securitization transaction that has been recorded as a sale, and recognized

retained interests that were recorded at the time of the transfer shall account for these

rights after the initial recognition as set out below:



1) The balance sheet balance of the retained interests that were retained shall be

amortized using the straight-line method, over the maturity period of the retained

interests, but over not more than a period of 36 months from the date of the

creation thereof (at the end of the first month 1/36 of the balance being amortized,

and at the end of the second month 1/35 to be amortized from the balance and so

on).

2) The need to record an impairment in value of the retained interests1 shall be

examined on each reporting date.

3) If, after the securitization, a material part of the retained interests that were

registered for parties not related to the transferor has been sold, the remaining

retained interests shall be measured according to the relevant paragraphs in the

Public Reporting Directives.

Credit to the public and off-balance sheet credit risk according to the size of the credit to

the borrower

38. In Note 4f - “Credit to the Public and Off-Balance Sheet Credit Risk to the Public

according to the Size of the Credit to the Borrower”, a banking corporation may

include in the column entitled “Balance sheet credit risk” the balance of “Other assets

in respect of derivative instruments of borrowers” and “Borrowers’ debentures”.

A banking corporation which so acts shall provide disclosure of the amount of the

related balances.

Contingent claims

39. In relation to claims whose realization is not remote, as stated in paragraph 47b(1)(c)

on page 663-11.1 of the Public Reporting Directives, a banking corporation is allowed

to report in a single figure the additional amount of exposure in respect thereof.

Assets and liabilities by linkage basis and maturity date

40. A banking corporation which has not made preparations to report future cash flows in

respect of assets and liabilities bearing variable interest according to the expected

change in the variable interest base derived from an accepted international market

yield curve (as required by paragraph 51.B. on page 663-16 in the Public Reporting

Directives), may report these cash flows on the assumption that no change will occur

in the variable interest base known on the reporting date.

Condensed financial statements according to the structure of the banking group

41. A banking corporation is allowed not to present the note on the Condensed Financial

Statements according to the structure of the banking corporation, which is required in

paragraph 79(b) on page 664-29 (in the format of Note 29A on pages 669-67 and

669-67.1) in the Public Reporting Directives.

Interested parties and related parties

42. For the purposes of the disclosure in the Note on interested parties and related parties

[section 80.D.(8), on page 665-2]:

1 See EITF 99-20: “Recognition of interest income and impairment on purchased and retained beneficial

interests in securitized financial assets.”



(a) Where a holding of a banking corporation is through provident funds and mutual

funds only, there shall be inserted instead of "corporation of which at least 10% is held" the words: "corporation of which at least 25% is held".

(b) With respect to subordinated loans or liabilities, as stated in paragraph 80.B.(d)(1) only, which have been reported in financial statements published before 31.12.96, section 80B.(d)(1) shall be deemed to state "ten per cent" instead of "five per cent".

Implementation of Proper Conduct of Banking Business Directive 305 – “Chief Accountant" 43. Where the Supervisor of Banks has fixed specific transitional provisions for a banking

corporation with respect to the implementation of Proper Conduct of Banking Business Directive 305 - "Chief Accountant", the corporation should apply to the Supervisor of Banks to obtain instructions regarding the signature on this statement.

Comparative data for amendments included in this Circular 44. Any banking corporation finding difficulty in classifying comparative data according

to these transitional provisions may apply to the Financial Reporting Unit Manager in the Banking Supervision Department who will consider specific guidance for such banking corporation, as appropriate.

Annual Report of Credit Card Company 45. The transitional provisions set out in Part A above shall also apply to credit card

companies, insofar as they are relevant to their annual and quarterly financial statements.

Management Review 46. A credit card company is allowed to report, in Appendix C to the Management Review

– “Rates of Interest Income and Expense of a Credit Card Company and its Consolidated Companies”, the average balance in the unlinked shekel segment based on balances at the beginning of each month.

47. A credit card company is allowed not to provide disclosure of exposures to foreign

countries, if there is no material exposure to foreign countries.

Financial Statements 48. A credit card company may report in the statement of cash flows, the change in

deposits in banks and from banks, and in credit to cardholders and to businesses, on a net basis.

49. Inventory and movement in points / stars – a credit card company is allowed not to

provide disclosure of the “Inventory and movement in points / stars” as set out in the note on “Creditors in respect of Credit Card Activity”.

50. The above-mentioned shall apply with the necessary changes to the quarterly report of

a credit card company published during 2012. Comparative data for amendments included in this Circular 51. Any credit card company finding difficulty in classifying comparative data according

to these transitional provisions may apply to the Financial Reporting Unit Manager in the Banking Supervision Department, who will consider specific guidance for such company, as appropriate.



APPENDIX A

Appendix G - Credit to the Public and Allowance for Credit Losses

D. Allowance for credit losses in respect of debts and in respect of off-balance-sheet credit instruments

Note: This format relates to a bank that is not a mortgage bank. A mortgage bank shall adapt the disclosure

provided by it to this format, with the necessary changes.

Reported amounts, NIS millions

Allowance for credit losses

On a collective

basis*

On an

individual

basis

By extent

of arrears Other Total

Balance of allowance for credit losses(1)

as at 31.12.2010 02 0

3 0

4 0

Three months ended 31.3.2011 (0) (0) (0) (0)

Net accounting write-offs recognized as of 1.1.2011** 0 0 0 0 Other changes in the allowance for credit losses as of 1.1.2011

(allocated to equity)**

0 0 0 0

Expenses in respect of credit losses 0 0 0 0 Accounting write-offs (0) (0) (0) (0)

Collection of debts written off in previous years 0 0 0 0 Net accounting write-offs (0) (0) (0) (0)

Other (in respect of acquisition / sale of loans, business

combinations, etc.)

0 0 0 0

Balance of allowance for credit losses as at 31.3.2011 0 0 0 0

* Including an allowance on a collective basis in respect of debts examined individually and found to be

unimpaired. A banking corporation is allowed not to distinguish between a collective allowance according

to extent of arrears, and another collective allowance, if its housing loan activity is not material (see

paragraph 28a).In addition, if all the allowances on a collective basis are made by extent of arrears, it shall

be called “by extent of arrears”.

** As a result of the initial implementation of the new directives regarding the measurement of impaired debt

and allowance for credit losses.

*** Pursuant to the new directives on the measurement of impaired debts and allowance for credit losses as at

1.1.2011, banking corporations are not required to maintain a general, supplementary, and extraordinary

provision for doubtful debts.

1) This amount was reported before 1.1.2011 under the item “provision for doubtful debts”.

2) This amount was reported before 1.1.2011 under the item “other specific provision”.

3) This amount was reported before 1.1.2011 under the item “specific provision by extent of arrears”.

4) This amount was reported before 1.1.2011 under the item “supplementary provision”.



Sample Condensed Quarterly Financial Statement

Appendix B – Condensed Consolidated Balance Sheet as at 31.3.2011

Banking Corporation Ltd. and its Consolidated Companies

Reported amounts

March 31

2011

March 31

2010

December 31

2010

(Unaudited) (Unaudited) (Audited)

NIS millions

Assets

Cash and deposits with banks 0 0 0 Securities 0 0 0 Securities borrowed or bought under repurchase agreements 0 0 0 Credit to the public 0 0*** 0***

Allowance for credit losses 0 0*** (0)***

Credit to the public, net 0 0 0

Credit to the Government 0 0 0 Investments in associated companies 0 0 0 Intangible assets and goodwill 0 0 0

Assets in respect of derivative instruments c 0 0 0

Buildings and equipment 0 0 0 Other assets 0 0 0 Total assets 0 0 0

Liabilities and capital

Deposits from the public 0 0 0 Deposits from banks 0 0 0 Deposits from the Government 0 0 0

Securities lent or sold under repurchase agreements 0 0 0

Debentures and subordinated notes 0 0 0

Liabilities in respect of derivative instruments 0 0 0

Other liabilities 0 0* 0*

Total liabilities 0 0 0

Shareholders' equity attributable to shareholders of the banking

corporation 0 0 0 Non-controlling interests 0 0* 0* Total shareholders' equity 0 0 0

Total liabilities and shareholders' equity 0 0 0

The accompanying notes are an integral part of these condensed financial statements. Names of Signatories XXXXXXXX XXXXXXXX

Position / Title XXXXXXXX XXXXXXXX Date of Approval of the Financial Statement XXXXXXXX

Notes: 1. When the most senior office-holder in the financial department for financial statements purposes complies

with Proper Conduct of Banking Business Directive – “Chief Accountant”, the Chief Accountant shall sign and his title shall be appended.

* On January 1, 2011, the Bank adopted for the first time the Directive of the Supervisor of Banks on “Measurement and Disclosure of Impaired Debts, Credit Risk, and Allowance for Credit Losses”. Comparative figures for previous years were not restated, and, therefore, data as at 31.3.2011 are not comparable with data marked with an asterisk (*) in 2010. [Any item materially affected by initial adoption of the Directive is to be marked with an asterisk (*)]. For further explanations of the effect of the initial adoption of the Directive, see Note X.

** The data have been reclassified to match the item headings and presentation method in the current period.


Management Review Page 671-8

Exhibit A-3 - Statement of Changes in Shareholders’ Equity

Banking Corporation Ltd. and its Consolidated Companies

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE PERIOD ENDING 31.3.2011

Reported Amounts

Capital reserves

Total

paid-up share

capital

and

capital

reserves

Accumulated other comprehensive income

Paid-up

share

capital

payments on

account of

shares

Perpetual

liabilities

From

premiums

From

benefits

following share-

based

payments

Others(as

itemized)

Adjustments

in respect of

presentation

of securities available-

for-sale at

fair value

Translation

adjustments*

Net gains (losses) on

cash flow

hedges

Retained

earnings

(deficits)

Dividend

proposed

or

declared after the

balance

sheet date

Other

capital

items

Total

equity

capital

NIS.millions

Statement of changes in shareholders’ equity for the period ending March 31 2011(unaudited)

Balance as at December 31 2010 0 0 0 0 0 0 0 0 0 0 0 0

Cumulative effect, net of tax , of initial implementation on 1.1.2011 of the directive on the measurement of impaired debt and allowance for credit losses Net profit for the period 0 0 0

Dividend 0 0

Benefits given to controlling

owner

0 0 0 0

Adjustments and changes deriving

from:

Share issue 0 0 0 0 0 Distribution of bonus shares 0 0 0

Conversion of convertible

liabilities into shares

0 0 0 0

Benefit from share-based

transactions

0 0

Benefits received from

controlling owner

0 0

Adjustments in respect of presentation of securities

available-for-sale at fair value

0 0 0 0

Adjustments in respect of

presentation of securities

available-for-sale reclassified to

statement of profit and loss

0 0

Related tax effect 0 0 Adjustments from translation of

financial statements *

0 0

Adjustments from translation of

financing resources*

0 0

Net gains (losses) of cash-flow

hedges

0 0 0

Net gains (losses) of cash-flow

hedges reclassified to statement of profit and loss

0 0

Related tax effect 0 0

Balance as at March 31 2011 0 0 0 0 0 0 0 0 0 0 0 0



Appendix C

This appendix includes a summary of the main provisions relating to the manner of presentation

of the statement of profit and loss in 2011:

1. Profit from financing activities (before provisions for doubtful debts) in respect of

derivative instruments and hedging activities

a. The information shall be included in the note profit from financing activity before

provisions for doubtful debts, as set out in Appendix C, and divided into four

components, as follows:

(1) An effective component of the hedge, to be presented together with the

income or expenses in respect of the hedged item1. This component shall

include the following three parts:

(a) the effective part of the hedge,

(b) the interest accrual (including linkage and exchange rate

differentials) in respect of the hedging derivative, which is not

included in the effective part of the hedge (sub-paragraph (a)

above),

(c) the amortization of the adjustment of the balance sheet value of the

hedged item.

In relation to fair value hedging, the effective part of the hedge shall be

charged immediately to the statement of profit and loss.

In relation to cash flow hedging, the effective part of the hedge shall be

charged to shareholders' equity as a component of other comprehensive

profit in the item, net profits (losses) in respect of cash flows. This part

shall be reclassified to the statement of profit and loss in accordance with

the principles provided in this directive and shall be classified together

with the results of the hedged item.

The other two parts shall be charged currently to the statement of profit

and loss.

Disclosure shall be given to the net effect of hedging derivative

instruments on financial income in respect of assets, financial expenses in

respect of liabilities and other income (expenses) included in profit from

financing activities, which are not included in the non-effective

component item of the hedging ratios.

(2) A non-effective component of the hedging ratios. This item shall include:

(a) a non-effective amount of hedges – the profit (loss) component in

respect of derivative instruments arising from the non-

effectiveness of the hedge, and a non-effective amount of hedges

of fair value, arising from changes in the fair value of the hedged

item that may be attributed to the hedged risk,

(b) a profit (loss) component in respect of derivative instruments,

which was taken out for the assessment of the effectiveness of the

hedge,

(c) net profits (losses) in respect of a firm commitment which is no

longer eligible as a fair value hedge,

(d) profits (losses) that have been reclassified since it is fairly certain

that the projected transactions shall not take place.

1 If the hedged item is a share, the effective component may be shown in profits (losses), net, from investments in

shares.



(3) Net income (expenses) in respect of ALM derivative instruments – this

item shall include the changes in the balance sheet balance of derivative

instruments, which shall not be designated to hedging ratios, constituting a

part of the bank's asset and liability management, except for changes

arising from receipts or payments.

(4) Net income (expenses) in respect of other derivative instruments – this

item shall include the changes in the balance sheet balance of derivative

instruments that do not hedge and do not constitute a part of the bank's

asset and liability management, except for changes arising from receipts

and payments.

2. Income from credit (to the public and to the government)

a. These items shall include income from interest, linkage differentials and exchange

rate differentials on credit.

b. These items shall include one-time commission collected from a borrower which

is not in consideration of a particular service or as a refund of special expenses,

but rather as an addition to interest. Such commission shall not be brought into

account as income in the year of collection, but shall be divided over the period of

the loan proportionately to the interest. For the purpose of these paragraphs, any

increased rate of interest shall be considered as one-time commission that the

banking corporation collects in the first year, in excess of the ordinary rate of

interest that the banking corporation collects in subsequent years. So, credit

facility allocation commissions shall be included, which shall be carried to

income proportionately to the period of the facility.

c. Interest on impaired debt – see paragraph 30 on page 662-10.

3. Income from cash and deposits in banks.

These items shall include income from interest, linkage differentials and exchange rate

differentials on deposits in banks (including central banks) and cash in foreign currency.

4. Income from debentures

a. These items shall include interest, linkage differentials and exchange rate

differentials accrued in the reporting year on investments in debentures, together

with the proportionate part of the disagio, or net of the proportionate part of the

agio, as defined in paragraph 24 on page 662-2 and together with amortization as

stated in paragraph 27A.d. on page 662-4.4.

b. Profits and losses from the sale of investments in debentures and from

adjustments to fair value of held-for-trading debentures shall be presented in

separate items as part of "other income from financial activity" as set out in

Appendix C. Disclosure shall be given to the part of the profits and losses in

respect of held-for-trading debentures relting to held-for-trading debentures that

are still held at the balance sheet date.

c. Income received from the Bank of Israel in respect of holding short-term loans

shall be included in this item, by period held.

d. Profit from the sale of debentures which are available-for-sale or held to maturity

shall be carried to the statement of profit and loss on sale, to the appropriate item

of profit or loss from the sale of debentures.



e. For the purposes of this paragraph – "profit or loss from the sale of available-for-

sale debentures" – is the difference between the proceeds received from the sale

of the debentures and their amortized cost on the date of sale, less an unrealized

profit or plus an unrealized loss from adjustments to fair value of an available-for-

sale security which is designated as hedged in a fair value hedge, which are

recognized in the statement of profit and loss during the hedging period in

accordance with that stated in Part A1 – Derivative instruments and hedging

activity. The profit or loss from the sale shall include in addition the amount that

has been reclassified from accumulated other comprehensive income to the

statement of profit and loss as a result of the sale.

f. For the purpose of this paragraph – "profit or loss from the sale of debentures held

to maturity" – the difference between the proceeds received from the sale of the

debentures and the balance sheet value at the date of sale. The profit or loss from

the sale shall include in addition the amount that has been reclassified from

accumulated other comprehensive income to the statement of profit and loss as a

result of the sale.

g. With reference to index-linked debentures, a banking corporation is permitted to

calculate the profit or loss from the sale, taking into account the data set forth in

paragraphs e. and f. above, according to the balance in the last monthly balance

sheet prior to the date of sale, providing calculation using this method is applied

consistently.

5. Expenses on deposits

a. The items of expenses on various types of deposits shall include interest and

linkage and exchange rate differentials.

b. The item of expenses on deposits of the public shall include the amortization of

the proportionate part of bonuses paid by the banking corporation to depositors in

approved savings plans, with the addition of interest, linkage and exchange rate

differentials accrued thereon. Expenses on savings plans shall be included

according to the method of accrual in accordance with the maximum rate of return

reached by the saver at the end of the savings period according to the terms of the

savings.

6. Expenses on debentures

a. This item shall include interest and linkage differentials and exchange rate

differentials.

b. This item shall include the expenses of issuing debentures proportionately to the

balance of the principal each year. Reimbursement of issue expenses shall be

deducted from this item.

c. This item shall include the amortization of the proportionate part of the "disagio"

on debentures issued, together with the interest and linkage differentials and

exchange rate differentials according to the "uniform yield" method, as stated in

paragraph 24.g. on page 662-4.

7. Income from financing transactions

This item shall include commissions in respect of acceptances, guarantees, documentary

credit, etc., which shall be divided proportionately to the transaction periods. Where the

amount of this item is not material, it shall be added to the item of other financial income.



8. Other financial income

a. This item shall include income of the banking corporation from commissions on

the early repayment of credit given. Income of the banking corporation from early

repayment commissions after deduction of the proportionate part relating to

financial capital shall be spread and included in the statement of profit and loss at

equal rates according to the balance of the period to maturity of the credit, or

within three years from the repayment date, whichever is the shorter period.

An essential condition for ascribing an event as “early repayment" is an

identifiable transfer of cash which is used to repay the balance of the debt. A new

loan which was extended to the debtor at the repayment date or close to that date

shall not be considered as cash used in the repayment of the debt.

An example for the calculation of the spreading taking financial capital into

account is in Appendix D.

b. This item shall include profits and losses from the sale of debentures and from

adjustments to fair value of held-for-trading debentures.

9. Other financial expenses

This item shall include the payments of fines to the Bank of Israel in respect of of

deviations from liquidity directives, etc.

10. Financial income and expenses

Financial income in respect of assets arising from one customer, or from a group of

customers the total of which exceeds 5% of total income shall be noted separately in the

note on "profit from financing operations before expenses in respect of credit losses",

giving details of the number of customers and the amounts of income.

The test noted above shall also be carried out respectively with regard to financial

expenses in respect of liabilities arising from one customer. For this purpose, a "group of

customers" means a corporation that controls another corporation and every corporation

controlled by it.

11. Profits (losses) from investments in shares, net

This item shall include, as in the example of the note "Profits (losses) from investments

in shares, net" in Appendix C, profits and losses from the sale of available-for-sale

shares, realized and unrealized profits and losses from adjustments to fair value of held-

for-trading shares, net, and income from a dividend on investments in available-for-sale

shares and held-for-trading shares.

12. Other income

a. This item shall include:

(1) Rental fees of buildings and equipment which are not used by the banking

corporation, net of maintenance expenses and depreciation on those

buildings and equipment as detailed in paragraph 71 on page 664-14 and

management fees;

(2) Management fees from related companies that are investee companies,

parent companies, and companies under their control.

b. Profit (net) from the sale of assets received in respect of the settlement of credit

and classified as "other assets" as stated in paragraph 30B on page 662-10.6 (A

loss (net) shall be classified as "other expenses"- see paragraph 72 on page 664-

14).



c. If income arises from the amount funded for severance pay, pension and vacation

pay on the amounts in respect of prior years required for supplementing the

appropriate reserves, this section shall include the amount of the difference. (A

negative difference shall be included in the item "Salaries and related expenses".

For this purpose:

"Supplementing the reserve"- the supplement derives from the excess of the

reserve at the end of the accounting year calculated on the basis of the last

monthly salary for that year, over the total of the current provision for the

accounting year and the reserve at the beginning of the year, net of severance

payments during the year;

"Current provision"- the provision required to cover the indebtedness created in

respect of the reporting period and calculated according to the last monthly salary.

d. A note shall give disclosure of other income as set forth in the sample note in the

Appendix.

e. Special banking corporations are permitted to present in the body of the statement

of profit and loss the total of "other operating income" in one item, with details

presented in a note.



Appendix D This appendix includes a condensed format of the statement of profit and loss and main notes in 2011.

Format of statement of profit and loss for a banking corporation - 2011 Banking Corporation Ltd and its subsidiaries

Statement of profit and loss for the year ended December 31, Reported amounts Consolidated The Banking Corporation 2011 2010 2009 2011 2010 2009 NIS millions Profit from financing activity before expenses in respect of

credit losses 0 0 0 0 0 0 Expenses in respect of credit losses 0 0 0 0 0 0 Profit from financing activity after expenses in respect of

credit losses 0 0 0 0 0 0 Operating and other income Operating commissions 0 0 0 0 0 0 Profits (losses) from investments in shares 0 0 0 0 0 0 Other income 0 0 0 0 0 0 Total operating and other income 0 0 0 0 0 0 Operating and other expenses Salaries and related expenses 0 0 0 0 0 0 Maintenance and depreciation of buildings and equipment 0 0 0 0 0 0 Amortization and impairment of intangible assets and

goodwill 0 0 0 0 0 0 Other expenses 0 0 0 0 0 0 Total operating and other expenses 0 0 0 0 0 0 Profit from ordinary activities before taxes 0 0 0 0 0 0 Provision for taxes on profit from ordinary activities 0 0 0 0 0 0 Profit from ordinary activities after taxes 0 0 0 0 0 0 Share of the banking corporation in profits from ordinary

activities after the effect of tax of investee companies (consolidated - associate) after the effect of tax 0 0 0 0 0 0

Net profit from ordinary activities: Before attribution to non-controlling interests 0 0 0 - - - Attributable to non-controlling interests 0 0 0 - - - Attributable to shareholders of the banking corporation 0 0 0 0 0 0 Profit, from ordinary activities, after taxes, before attribution

to non-controlling interests of investee companies 0 0 0 0 0 0 Net profit: Before attribution to non-controlling interests 0 0 0 - - - Attributable to non-controlling interests 0 0 0 - - - Attributable to shareholders of the banking corporation 0 0 0 0 0 0

New Israeli shekels Earnings per ordinary share - Basic earnings: Net profit from ordinary activities attributable to

shareholders of the banking corporation 0.00 0.00 0.00 0.00 0.00 0.00 Profit from extraordinary activities after taxes attributable to

shareholders of the banking corporation 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 0.00 0.00 0.00 0.00 0.00

Diluted earnings**: Net profit from ordinary activities attributable to

shareholders of the banking corporation 0.00 0.00 0.00 0.00 0.00 0.00 Profit from extraordinary activities after taxes attributable to

shareholders of the banking corporation 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 0.00 0.00 0.00 0.00 0.00

* The notes form an integral part of the financial statements.

** If the basic earnings per ordinary share and the diluted earnings per ordinary share are equal for all the periods, they may be

presented on one line.



Note for profit from financing activity (before expenses in credit losses) in a banking corporation

(cont’d)

Consolidated The Banking Corporation

2011 2010 2009 2011 2010 2009

NIS millions

Reported amounts

a. In respect of assets *

From credit to the public 0 0 0 0 0 0

From credit to the Government 0 0 0 0 0 0

From deposits in banks 0 0 0 0 0 0

From deposits in the Bank of Israel and from cash 0 0 0 0 0 0

From securities borrowed or purchased in resale agreements 0 0 0 0 0 0

From debentures 0 0 0 0 0 0

From other assets 0 0 0 0 0 0

b. In respect of liabilities *

On deposits of the public 0 0 0 0 0 0

On deposits of the Government 0 0 0 0 0 0

On deposits from the Bank of Israel and from cash 0 0 0 0 0 0

On deposits from banks 0 0 0 0 0 0

On securities borrowed or purchased in repurchase

agreements 0 0 0 0 0 0

On debentures 0 0 0 0 0 0

On other liabilities 0 0 0 0 0 0

c. In respect of derivatives and hedging activities

Non-effective part of hedging ratios (see f. below) ** 0 0 0 0 0 0

Income (expenses) net in respect of ALM derivative

instruments *** 0 0 0 0 0 0

Income (expenses) net in respect of other derivative

instruments 0 0 0 0 0 0

d. Other

Commissions from financing transactions * 0 0 0 0 0 0

Other financial income * 0 0 0 0 0 0

Other financial expenses 0 0 0 0 0 0

Total profit from financing activity before expenses in

respect of credit losses 0 0 0 0 0 0

Of which: exchange rate differences, net 0 0 0 0 0 0

* Includes effective component of hedging ratios

** Except for effective component of hedging ratios.

*** Derivative instruments constituting a part of the bank's asset and liability management, which is not designated for hedging

ratios.




e. Details of operating results of investments in debentures


2011 2010 2009 2011 2010 2009

NIS millions

Reported amounts

Financial income on accrual basis from debentures:

Held to maturity 0 0 0 0 0 0

Available-for-sale 0 0 0 0 0 0

Held for trading 0 0 0 0 0 0

Total included in profit from financing activity in respect of

assets 0 0 0 0 0 0

Profits (losses) from the sale of debentures held to maturity,

net *

Profits from the sale of available-for-sale debentures 0 0 0 0 0 0

Losses from the sale of available-for-sale debentures *, ** 0 0 0 0 0 0

Realized and unrealized profits (losses) from adjustments to

fair value of held-for-trading debentures, net *** 0 0 0 0 0 0

Total included in other financial income 0 0 0 0 0 0

Total from investments in debentures 0 0 0 0 0 0

* Including provisions for impairment.

** Of which in respect of the transfer of held-for-trading debentures amounting to NIS XX million (previous year NIS XX

million)

*** Of which share of the profits and losses related to held-for-trading debentures which are still held at the balance sheet date

amounting to NIS XX million (previous year – NIS XX million).




(contd.)

e. Non effective part of hedging ratios Consolidated The Banking Corporation 2011 2010 2009 2011 2010 2009 NIS millions Reported amounts a. Fair value hedges Non-effectiveness of hedges 0 0 0 0 0 0 Component of profit (loss) in respect of derivative

instruments which is taken out for the purpose of assessing the effectiveness of the hedge 0 0 0 0 0 0

Profits (losses) net in respect of a firm commitment which is no longer eligible as a fair value hedge 0 0 0 0 0 0

b. Cash flow hedges Non-effectiveness of hedges 0 0 0 0 0 0 Component of profit (loss) in respect of derivative

instruments which is taken out for the purpose of assessing the effectiveness of the hedge 0 0 0 0 0 0

Profits (losses) reclassified as it its almost certain that the projected transactions will not take place 0 0 0 0 0 0

Total 0 0 0 0 0 0


2011 2010 2009 2011 2010 2009

NIS millions

Reported amounts

Financial income (expenses) in respect of assets (Item a) 0 0 0 0 0 0

Financial income (expenses) in respect of liabilities (Item b) 0 0 0 0 0 0

Other financial income (expenses) (Item d)* 0 0 0 0 0 0

* Details of the effect of hedging derivative instruments on sub-items a., b., and d. in the note on profit from financing activities

(before expenses in respect of credit losses).



Note for profits (losses) from investments in shares, net in a banking corporation

Consolidated The Banking Corporation 2011 2010 2009 2011 2010 2009 NIS millions Reported amounts Profits from sale of available-for-sale shares 0 0 0 0 0 0 Losses from sale of available-for-sale shares * 0 0 0 0 0 0 Realized and unrealized profits (losses) from adjustments to

fair value of held-for-trading shares, net** 0 0 0 0 0 0 Dividend from available-for-sale and held-for-trading shares 0 0 0 0 0 0 Total from investments in shares 0 0 0 0 0 0

* Of which in respect of the transfer of shares to the held-for-trading portfolio – NIS XX million (previous year – NIS XX

million), including provisions for impairment.

** Of which, share of profits (losses) related to held-for-trading shares which are still held at the balance sheet date amounting to

nos XX million (previous year – NIS XX million)

Consolidated The banking corporation 2011 2010 2009 2011 2010 2009 NIS millions Reported amounts Profit from severance pay funds etc. 0 0 0 0 0 0 Profit from sale of assets received in respect of settlement of

credit 0 0 0 0 0 0 Management fees from related companies 0 0 0 0 0 0 Other 0 0 0 0 0 0 ------------------------------------------- 0 0 0 0 0 0 ------------------------------------------- 0 0 0 0 0 0 ------------------------------------------- 0 0 0 0 0 0 ------------------------------------------- 0 0 0 0 0 0 Total other income 0 0 0 0 0 0



Statement of profit and loss for the year ended December 31, 20X0 for a credit card company and

its subsidiaries Consolidated The Company 2011 2010 2009 2011 2010 2009

Reported amounts NIS millions Income From transactions in credit cards (1) 0 0 0 0 0 0 Profit from financing activity after expenses in respect of

credit losses 0 0 0 0 0 0 Others 0 0 0 0 0 0 Total income 0 0 0 0 0 0 Expenses In respect of credit losses 0 0 0 0 0 0 Operating 0 0 0 0 0 0 Selling and marketing 0 0 0 0 0 0 General and administrative 0 0 0 0 0 0 Payments to banks 0 0 0 0 0 0 Total expenses 0 0 0 0 0 0 Profit from ordinary activities before taxes 0 0 0 0 0 0 Provision for taxes on profit from ordinary activities 0 0 0 0 0 0 Profit from ordinary activities after taxes 0 0 0 0 0 0 Company's share in profits from ordinary activities after the

effect of tax of investee companies (consolidated - associates) after the effect of tax 0 0 0 0 0 0

Net profit from ordinary activities: Before attribution to non-controlling interests 0 0 0 - - - Attributable to non-controlling interests 0 0 0 - - - Attributable to shareholders of the credit card company 0 0 0 0 0 0 Profit from extraordinary activities after taxes before

attribution to non-controlling interests 0 0 0 0 0 0 Net profit: Before attribution to non-controlling interests 0 0 0 - - - Attributable to non-controlling interests 0 0 0 - - - Attributable to shareholders of the credit card company 0 0 0 0 0 0

Earnings per ordinary share (in NIS): Basic earnings: Net profit from ordinary activities attributable to

shareholders of the credit card company 0.00 0.00 0.00 0.00 0.00 0.00 Profit from extraordinary activities after taxes attributable to

shareholders of the credit card coy 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 0.00 0.00 0.00 0.00 0.00

Diluted earnings (2) Net profit from ordinary activities attributable to

shareholders of the credit card company 0.00 0.00 0.00 0.00 0.00 0.00 Profit from extraordinary activities after taxes attributable to

shareholders of the credit card coy 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 0.00 0.00 0.00 0.00 0.00

The notes form an integral part of the financial statements.

(1) Gross approach – Income from commissions from businesses are presented without offset of commissions to other

issuers, which are presented separately as a part of operating expenses (see Note 25)

See also Note 2 – Accounting policies

Net approach – Income from commissions from businesses are presented net of commissions to other issuers (see

Note 22), see also Note 2 – Accounting policies.

(2) If the basic earnings per ordinary share and the diluted earnings per ordinary share are equal for all the periods, they

may be presented on one line.

Documents

The Supervisor of Banks: 671-1 - boi.org.il · 16. In quarterly and annual financial statements for 2011, a banking corporation may continue measuring fair value by using a representative