Israel Discount Bank : Changes in articles of association

ISRAEL DISCOUNT BANK LTD.

Registration no.: 520007030

FAO:	Israel Securities Authority	FAO:	The Tel Aviv Stock Exchange Ltd.	T102 (Public)	Magna transmission date: August 8, 2017
www.isa.gov.il	www.tase.co.il	Reference No.: 2017-01-081396

IMMEDIATE REPORT REGARDING CHANGES IN ARTICLES OF ASSOCIATION

Regulation 31C of the Securities Regulations (Periodic and Immediate Reports), 5730-1970

1. On August 8, 2017 it was resolved at a General Meeting to make changes to the Articles of Association of the Corporation.

2. Nature of the change:

1. Amending Article 6A to the Bank's Articles of Association, as well as amending the Bank's Memorandum of Association, regarding increasing the authorized capital of the Bank.

2. Amending Article 50 to the Bank's Articles of Association regarding authority to adopt a resolution on the distribution of a dividend.

3. Adding Article 25B to the Bank's Articles of Association, as well as amending Article 27 to the Bank's Articles of Association, regarding matters relating to voting at a shareholders' meeting.

3. Text of the change:

See Articles 6A, 50, 25B and 27 of the Bank's Articles of Association, as well as the Bank's Memorandum of Association, which are attached to this report.

1. Date on which the change takes effect: August 8, 2017
2. Attached as Appendices A and B below are the Articles of Association and the Memorandum of Association, respectively, following the changes

The Report has been signed on behalf of the Corporation, in accordance with Regulation 5 of the Securities Regulations (Periodic and Immediate Reports), 5730-1970, Adv. Michal Sokolov-Danoch, Corporate Secretary of the Bank.

Reference numbers of previous documents relating to this topic (their mention does not constitute their inclusion by way of reference):

The securities of the Corporation are listed for trade on the Tel Aviv Stock Exchange	Date of updating structure of form: 07/08/2017
Abbreviated name: Discount
Address: 23 Yehuda Halevi St., Tel Aviv 6513601, IsraelTel: 972-3-5145582; 972-3-5145544;Fax: [phone]
Email:[e-mail]
Prior names of the reporting entity:
Name of person making electronic report: Sokolov-Danoch, MichalPosition: Corporate SecretaryName of Employing Company:
Address: 23 Yehuda Halevi St., Tel Aviv 6513601, IsraelTel: 972-3-5145582;Fax: [phone]Email:[e-mail]

Israel Discount Bank's Immediate Reports are published in Hebrew on the website of the Israel Securities Authority and the Tel Aviv Stock Exchange.

The English translation is prepared for convenience purposes only.

In the case of any discrepancy between the English and Hebrew versions, the Hebrew will prevail.

1

Israel Discount Bank Ltd. [1/2017]

1

APPENDIX A ISRAEL DISCOUNT BANK LIMITED A Company Limited by Shares Company Articles of Association Preamble

1. In these Articles of Association, unless the matter or the written form requires otherwise:

   The "Company"	Israel Discount Bank Limited.
   The "Law"	The Companies Law, 5759-1999 and the Regulations made thereunder, as they may be from time to time, as well as the sections of the Companies Ordinance which have not been cancelled.
   The "Office"	The registered office of the Company at the time.
   The "Register of Shareholders"	Within the meaning in the Law.
   "Seal"	The common seal of the Company.
   "Year"	The period from January 1 until December 31 of the same year, inclusive.
   "In Writing" or "Written"	Including anything made in writing or in any manner in lieu of writing, or partly one and partly the other.
   "Banking Ordinance"	The Banking Ordinance, 1941, as may be amended from time to time or any other arrangement that may replace it.
   "Banking corporation having no core controlling interest"	Within the meaning of this term in the Banking Ordinance.
   "Committee for the Appointment of Directors"	A committee for appointing directors, appointed pursuant to the Banking (Licensing) Law

   1025487 (ENG)

   "External director"

   As defined in the Companies Law, 5759-1999 or in Directive 301 of the Proper Conduct of Banking Business Directives

2. A term not defined in Article 1 above shall have the meaning determined in section 1 of the Companies Law, unless this is contrary to the written matter or its contents.

3. The headings in these Articles of Association are intended for the sake of convenience only and shall not affect the interpretation of the Articles of Association.

   Limitation of Liability

4. The liability of the shareholders is limited, as set forth in the Memorandum of Association of the Company.

   Objectives of the Company

5. The objectives of the Company are as set forth in the Memorandum of Association of the Company.

   Authorized Capital

6. The authorized share capital of the Company is NIS 260,515,201.60 par value. The share capital is divided as follows:

7. Class A ordinary shares of NIS 0.1 par value each - 2,605,150,000.

8. 40,000 6% cumulative preferred shares of NIS 0.00504 par value each (equivalent to 10 pounds sterling each).

9. The rights granted by the shares:

10. Class A ordinary shares

    The Class A ordinary shares rank equally among themselves for all intents and purposes.

    Each Class A ordinary share vests in its owner the right to be invited, to participate in and vote at general meetings of the Company, the right to receive dividends or profits, if any, and the right to participate in a distribution of surplus assets of the Company at the time of winding up.

    Each Class A ordinary share has one vote at any voting.

11. 6% cumulative preferred shares of NIS 0.00504 par value each (equivalent to 10 pounds sterling each)

    To the preferred shares shall be attached the following special rights:

12. The right to a fixed cumulative preferred dividend at the rate of 6% (six percent) per annum on the capital for the time being paid up thereon.

13. The right in a winding up to have the capital paid up thereon and all arrears of dividend up to the date of the commencement of the winding up paid off in priority to any payment of capital on the shares of IL 1, shares of IL 10 and "B" shares of IL 1 in the Company, but with no further or other right to participate in the profits or assets of the Company.

14. The fixed cumulative dividend of 6% (six per cent) payable on the preferred shares and return of the paid-up capital thereon in a winding up of the Company shall be linked to the rate of exchange of the Israeli pound to the pound sterling, that is, five Israeli pounds and four agurot are equal to one pound sterling. If on the due date of payment to the holders of the preferred shares on account of dividend or on account of repayment of capital in a winding up (hereinafter referred to as "the Determining Date") the price of the pound sterling shall be different from IL 5.04, the Company shall pay for every IL 5.04 of such dividend and/or capital such an amount in Israeli pounds as may be equivalent to one pound sterling at its price on the Determining Date.

    The expression "the price of the pound sterling" or "its price" shall mean the Bank of Israel's selling rate for the pound sterling existing on the Determining Date for bankers' telegraphic transfers on London.

    With respect to dividends or arrears of dividend, the day when such dividend or arrears of dividend are declared shall be considered as the due date of payment; with respect to arrears of dividend in the case of a winding up or return of capital in a winding up - the day of the commencement of such winding up shall be considered as the due date of payment of such arrears of dividend or return of capital.

15. The preferred shares shall not entitle the holders to receive notice of or attend or vote at any general meeting by virtue of their holding thereof unless either:

16. at the date of the notice convening the general meeting the dividend thereon is one year in arrear,

17. the business of the Meeting includes the consideration of a resolution for reducing the capital by repaying the whole or any part of the capital paid on the preferred shares, or for the sale of the undertaking of the Company, or for altering the objectives of the Company, or for winding up the Company, or any resolution varying or abrogating any of the special rights or privileges attached to the preferred shares - and in which case they shall only be entitled to vote on any such resolution.