UPDATE 1-Israel Discount Bank's profit falls, to cut more jobs

(Adds more details on reorganisation)

TEL AVIV, Dec 1 (Reuters) - Israel Discount Bank (DSCT.TA), the country's third-largest lender, said on Monday its third-quarter net profit fell as a weakening economy led to a rise in bad debt provisions.

The bank also said it approved a reorganisation plan to improve efficiencies and reduce the number of senior management.

Discount made a net profit in the quarter of 110 million shekels ($28 million), or 0.11 shekels per share, down from 392 million shekels, or 0.40 shekel a share, in the same period last year.

The result for the third quarter in 2007 included 80 million shekels in gains from the sale of funds.

Analysts on average estimated the bank would earn 48 million shekels, according to a survey of four analysts polled by Reuters.

Provisions for doubtful, or bad debt, in the quarter rose to 182 million shekels from 108 million a year earlier, while financing income before the debt provision decreased to 1.06 billion shekels from 1.21 billion.

"The sharp declines in stock markets at home and abroad, together with the collapse of leading financial institutions, have required increased provisioning to reflect the decline in value of our securities portfolio and certain of our non-financial investments," President and Chief Executive Giora Offer said in a statement.

REORGANISATION

Discount said it will reallocate operations within two divisions -- assets under management and strategy and marketing -- to other divisions, reducing the number of senior managers.

Other sectors will also be combined, the bank said, leading to a reduction of about 300 positions in 2009, following cuts of 350 being carried out in 2008. The bank employs 6,500 people.

In recent days Israel's other top banks recorded weak quarterly results due to the global financial crisis and slowing Israeli economy.

Hapoalim (POLI.TA), Israel's largest bank in terms of assets, posted a nearly 50 percent drop in quarterly profit. Leumi (LUMI.TA), Israel's largest bank in terms of market value, swung to a loss after a 1.01 billion shekel profit a year ago.

First International Bank of Israel (FTIN5.TA), the fifth-largest lender, said its third-quarter net profit slid 74 percent while Mizrahi Tefahot Bank (MZTF.TA) posted a 24 percent drop in profits.

Israel's economy has started to weaken due to slowing exports and investment, which has weighed on banks' bottom lines. The economy grew at an annualised 2.3 percent rate in the third quarter after 4.1 percent the prior three months. Growth is expected at 4.5 percent in 2008 and only 1.5 percent in 2009. ($1=3.92 shekels) (Reporting by Tova Cohen; Editing by Greg Mahlich)