First International Bank Group Presents Results for the Third Quarter 2017
TEL AVIV, Israel, Nov. 15, 2017 /PRNewswire/ --
Third Quarter Highlights
- Growth of 58.6% in net earnings to NIS 203 million;
- Growth of 25% in pre-tax earnings to NIS 281 million;
- Return on equity: 11.1%; and with the elimination of income from taxes in respect of prior years – return on equity of 9.3%;
- Year-over-year growth of 4.5% in earnings from financing activities;
- Reduction of 3.3% in operating and other expenses, and improvement to 68.8% in the cost/income ratio;
- Growth of 3.8% in credit to the public in the first nine months of the year, mostly in the private customer segment (4.8%) and in the small business segment (4.9%);
- Ratio of Tier I equity capital to risk weighted assets: 10.32%;
- Dividend of NIS 100 million to be issued for the quarter.
Management Comment
Mrs. Smadar Barber-Tsadik, CEO of the First International Bank Group (TASE: FTIN), "The good results for the quarter reflect the growth trend of the Group which is evident in both the growth in credit to the public and in deposits by the public. This along continued and consistently improving efficiencies, which are reflected across all expense items, while maintaining a high level of financial stability.
"The First International Bank emphasizes the promotion of digital services and innovation combined with professional service to customers. We recently introduced new innovations to both our website and mobile banking applications, introducing advise.me – an investment advisory service accessible on the mobile phone, comprising a breakthrough in the world of investment consultation, which caters its service specifically to customer requirements."
Profitability and Growth
Net earnings in the third quarter increased by 58.6% in comparison to the corresponding quarter last year and amounted to NIS 203 million. Return on equity reached 11.1%.
In the third quarter of the year, the Bank recognized income from prior years' taxes which amounted to NIS 32 million. The pre-tax earnings in the third quarter increased by approximately 25% and amounted to NIS 281 million. The return on equity, with the elimination of income from taxes in respect of prior years, in the amount of NIS 32 million, reached 9.3% for the quarter.
In the first nine months of the year net earnings grew by 27.1% in comparison to the corresponding period last year and amounted to NIS 520 million. Return on equity reached 9.4%. Pre-tax earnings amounted to NIS 774 million, a year-over-year increase of 13.7%. Net interest income increased by 6% in the first nine months of the year, in comparison to the corresponding period last year, and amounted to NIS 1,710 million. The increase stemmed from operations, mostly from the growth in the credit portfolio.
The growth of the Group is apparent from both the credit and the deposit side. The credit to the public portfolio grew by 3.8% in the first nine months of the year. The growth in the credit portfolio is characterized by the continuous distribution of the credit granted and is most noticeable in the private customer segment, which grew by 4.8%, in the small business segment, which grew by 4.9%, and in the middle market and large businesses segment, which grew by 1.1%.
Credit loss expenses in the third quarter of the year amounted to a rate of 0.04% of total credit to the public, and in the first nine months of the year to 0.16%. The total amount of doubtful debts decreased by 12.7% in relation to the level as of the end of 2016.
Efficiency
The First International Bank continues to improve efficiencies in accordance with its strategic outline and achieved a decrease of 3.3% (NIS 22 million) in total operating and other expenses for the quarter, in comparison to the corresponding quarter last year, and amounted to NIS 640 million. The reduction in expenses for the quarter is noted across all expense items, including payroll and related expenses, which decreased by 1.7%.
The gradual and consistent improvement in the efficiency ratio continued, and showed a third quarter improvement of the cost income ratio to 68.8%, in contrast to 69.6% in the second quarter of the current year.
Financial stability
The growth trend of the capital attributed to the shareholders of the Bank continued, growing by 5.3% in comparison to the end of 2016, and amounting to NIS 7,706 million. The Tier I equity capital ratio increased reaching 10.32%, as compared to 10.09% at December 31, 2016, and the comprehensive capital ratio increased to 13.94%
The Board of Directors of the Bank decided on a dividend distribution of NIS 100 million. This is in addition to dividend distributions totaling NIS 210 million since the beginning of the year.
Condensed principal financial information and principal execution indices
Principal financial ratios |
For the nine months ended |
For the year ended |
||||||
30.9.17 |
30.9.16 |
31.12.16 |
||||||
in % |
||||||||
Execution indices |
||||||||
Return on equity(1) |
9.4% |
7.6% |
7.2% |
|||||
Return on assets(1) |
0.5% |
0.4% |
0.4% |
|||||
Ratio of fees to assets(1) |
1.0% |
1.0% |
1.0% |
|||||
Ratio of equity capital tier 1 |
10.32% |
10.05% |
10.09% |
|||||
Leverage ratio |
5.69% |
5.66% |
5.52% |
|||||
Liquidity coverage ratio |
122% |
109% |
123% |
|||||
Efficiency ratio |
69.1% |
73.5% |
73.5% |
|||||
Credit quality indices |
||||||||
Ratio of provision for credit losses to credit to the public |
1.05% |
1.10% |
1.08% |
|||||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public |
0.98% |
1.07% |
1.02% |
|||||
Ratio of provision for credit losses to total impaired credit to the public |
150% |
135% |
147% |
Principal data from the statement of income |
For the nine months ended |
|||||
30.9.17 |
30.9.16 |
Change |
||||
NIS million |
% |
|||||
Net profit attributed to shareholders of the Bank |
520 |
409 |
27.1% |
|||
Interest Income, net |
1,710 |
1,613 |
6.0% |
|||
Expenses from credit losses |
96 |
46 |
108.7% |
|||
Total non Interest income |
1,104 |
1,132 |
(2.5%) |
|||
Of which: Fees |
972 |
982 |
(1.0%) |
|||
Total operating and other expenses |
1,944 |
2,018 |
(3.7%) |
|||
Of which: Salaries and related expenses |
1,218 |
1,243 |
(2.0%) |
|||
Primary net profit per share of NIS 0.05 par value (NIS) |
5.18 |
4.08 |
27.0% |
Principal data from the balance sheet |
As of |
Change vs. |
||||||||
30.9.17 |
30.9.16 |
31.12.16 |
30.9.16 |
31.12.16 |
||||||
NIS million |
% |
|||||||||
Total assets |
129,888 |
126,071 |
127,907 |
3.0% |
1.5% |
|||||
of which: Cash and deposits with banks |
33,205 |
26,672 |
29,150 |
24.5% |
13.9% |
|||||
Securities |
10,590 |
16,127 |
15,776 |
(34.3%) |
(32.9%) |
|||||
Credit to the public, net |
80,236 |
78,079 |
77,328 |
2.8% |
3.8% |
|||||
Total liabilities |
121,563 |
118,054 |
119,973 |
3.0% |
1.3% |
|||||
of which: Deposits from banks |
782 |
789 |
755 |
(0.9%) |
3.6% |
|||||
Deposits from the public |
108,394 |
104,549 |
105,817 |
3.7% |
2.4% |
|||||
Bonds and subordinated capital notes |
5,230 |
5,597 |
5,801 |
(6.6%) |
(9.8%) |
|||||
Capital attributed to the shareholders of the Bank |
7,706 |
7,411 |
7,321 |
4.0% |
5.3% |
Additional data |
As of |
|||||
30.9.17 |
30.9.16 |
31.12.16 |
||||
Share price (NIS 0.01) |
6,599 |
4,790 |
5,650 |
|||
Dividend per share (NIS) |
2.09 |
- |
1.99 |
(1) Annualized.
CONSOLIDATED STATEMENT OF INCOME
(NIS million)
For the three months |
For the nine months |
For the year Ended |
||||||||||
NOTE |
2017 |
2016 |
2017 |
2016 |
2016 |
|||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||||
Interest Income |
2 |
615 |
682 |
2,008 |
1,899 |
2,526 |
||||||
Interest Expenses |
2 |
50 |
129 |
298 |
286 |
357 |
||||||
Interest Income, net |
565 |
553 |
1,710 |
1,613 |
2,169 |
|||||||
Expenses from credit losses |
6,12 |
9 |
21 |
96 |
46 |
80 |
||||||
Net Interest Income after expenses from credit losses |
556 |
532 |
1,614 |
1,567 |
2,089 |
|||||||
Non-Interest Income |
||||||||||||
Non Interest Financing income |
3 |
38 |
24 |
71 |
91 |
115 |
||||||
Fees |
321 |
326 |
972 |
982 |
1,300 |
|||||||
Other income |
6 |
5 |
61 |
59 |
65 |
|||||||
Total non-Interest income |
365 |
355 |
1,104 |
1,132 |
1,480 |
|||||||
Operating and other expenses |
||||||||||||
Salaries and related expenses |
397 |
404 |
1,218 |
1,243 |
1,656 |
|||||||
Maintenance and depreciation of premises and equipment |
94 |
104 |
287 |
309 |
409 |
|||||||
Amortizations and impairment of intangible assets |
24 |
31 |
69 |
93 |
116 |
|||||||
Other expenses |
125 |
123 |
370 |
373 |
502 |
|||||||
Total operating and other expenses |
640 |
662 |
1,944 |
2,018 |
2,683 |
|||||||
Profit before taxes |
281 |
225 |
774 |
681 |
886 |
|||||||
Provision for taxes on profit |
78 |
91 |
261 |
303 |
398 |
|||||||
Profit after taxes |
203 |
134 |
513 |
378 |
488 |
|||||||
The bank's share in profit of equity-basis investee, after taxes |
12 |
3 |
38 |
62 |
72 |
|||||||
Net profit: |
||||||||||||
Before attribution to noncontrolling interests |
215 |
137 |
551 |
440 |
560 |
|||||||
Attributed to noncontrolling interests |
(12) |
(9) |
(31) |
(31) |
(39) |
|||||||
Attributed to shareholders of the Bank |
203 |
128 |
520 |
409 |
521 |
|||||||
NIS |
||||||||||||
Primary profit per share attributed to the shareholders of the Bank |
||||||||||||
Net profit per share of NIS 0.05 par value |
2.01 |
1.27 |
5.18 |
4.08 |
5.19 |
The notes to the financial statements are an integral part thereof.
STATEMENT OF COMPREHENSIVE INCOME(1)
(NIS million)
For the three months |
For the nine months |
For the year Ended |
||||||||
2017 |
2016 |
2017 |
2016 |
2016 |
||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||
Net profit before attribution to noncontrolling interests |
215 |
137 |
551 |
440 |
560 |
|||||
Net profit attributed to noncontrolling interests |
(12) |
(9) |
(31) |
(31) |
(39) |
|||||
Net profit attributed to the shareholders of the Bank |
203 |
128 |
520 |
409 |
521 |
|||||
Other comprehensive income (loss) before taxes: |
||||||||||
Adjustments of available for sale securities to fair value, net |
18 |
4 |
83 |
40 |
14 |
|||||
Adjustments from translation of financial statements(1) net after the effect of hedges(2) |
- |
(1) |
- |
(1) |
(3) |
|||||
Adjustments of liabilities in respect of employee benefits(3) |
(9) |
(93) |
25 |
(158) |
(131) |
|||||
Other comprehensive income (loss) before taxes |
9 |
(90) |
108 |
(119) |
(120) |
|||||
Related tax effect |
(3) |
31 |
(38) |
40 |
38 |
|||||
Other comprehensive income (loss) before attribution to noncontrolling interests, after taxes |
6 |
(59) |
70 |
(79) |
(82) |
|||||
Less other comprehensive (income) loss attributed to noncontrolling interests |
- |
11 |
(3) |
10 |
10 |
|||||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes |
6 |
(48) |
67 |
(69) |
(72) |
|||||
Comprehensive income before attribution to noncontrolling interests |
221 |
78 |
621 |
361 |
478 |
|||||
Comprehensive income attributed to noncontrolling interests |
(12) |
2 |
(34) |
(21) |
(29) |
|||||
Comprehensive income attributed to the shareholders of the Bank |
209 |
80 |
587 |
340 |
449 |
(1) See note 4.
(2) Adjustments from translation of financial statements of foreign operation which its currency of operation is different from the currency of operation of the Bank.
(3) Hedges-gains (losses) regarding the hedging of investment in foreign currency.
(4) Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits pension plans, of amounts recorded in the past in other comprehensive profit.
The notes to the financial statements are an integral part thereof.
CONSOLIDATED BALANCE SHEET
(NIS million)
30.9.17 |
30.9.16 |
31.12.16 |
||||||
NOTE |
(unaudited) |
(unaudited) |
(audited) |
|||||
Assets |
||||||||
Cash and deposits with banks |
33,205 |
26,672 |
29,150 |
|||||
Securities |
5 |
10,590 |
16,127 |
15,776 |
||||
Securities which were borrowed |
895 |
505 |
414 |
|||||
Credit to the public |
6,12 |
81,091 |
78,944 |
78,175 |
||||
Provision for Credit losses |
6,12 |
(855) |
(865) |
(847) |
||||
Credit to the public, net |
80,236 |
78,079 |
77,328 |
|||||
Credit to the government |
652 |
653 |
654 |
|||||
Investments in investee company |
549 |
505 |
514 |
|||||
Premises and equipment |
1,097 |
1,144 |
1,133 |
|||||
Intangible assets |
226 |
223 |
243 |
|||||
Assets in respect of derivative instruments |
10 |
1,203 |
1,139 |
1,332 |
||||
Other assets(2) |
1,235 |
980 |
1,020 |
|||||
Assets held for sale |
- |
44 |
343 |
|||||
Total assets |
129,888 |
126,071 |
127,907 |
|||||
Liabilities, temporary equity and Shareholders' Equity |
||||||||
Deposits from the public |
7 |
108,394 |
104,549 |
105,817 |
||||
Deposits from banks |
782 |
789 |
755 |
|||||
Deposits from the Government |
846 |
515 |
570 |
|||||
Bonds and subordinated capital notes |
5,230 |
5,597 |
5,801 |
|||||
Liabilities in respect of derivative instruments |
10 |
1,160 |
1,300 |
1,356 |
||||
Other liabilities(1)(3) |
5,151 |
5,304 |
4,929 |
|||||
Liabilities held for sale |
- |
- |
745 |
|||||
Total liabilities |
121,563 |
118,054 |
119,973 |
|||||
Temporary equity - noncontroling interests |
336 |
329 |
330 |
|||||
Capital attributed to the shareholders of the Bank |
7,706 |
7,411 |
7,321 |
|||||
Noncontrolling interests |
283 |
277 |
283 |
|||||
Total equity |
7,989 |
7,688 |
7,604 |
|||||
Total liabilities, temporary equity and shareholders' equity |
129,888 |
126,071 |
127,907 |
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 64 million and NIS 72 million and NIS 71 million at 30.9.17, 30.9.16 and 31.12.16, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 319 million and NIS 260 million and NIS 238 million at 30.9.17, 30.9.16 and 31.12.16, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 607 million and NIS 569 million and NIS 491 million at 30.9.17, 30.9.16 and 31.12.16, respectively.
The notes to the financial statements are an integral part thereof.
STATEMENT OF CHANGES IN EQUITY
(NIS million)
For the three months ended September 30, 2017 (unaudited) |
||||||||||||
Share capital and premium(1) |
Accumulated other comprehensive income (loss) |
Retained earnings (2) |
Total share-holders' equity |
Non- controlling interests |
Total equity |
|||||||
Balance as of June 30, 2017 |
927 |
(116) |
6,752 |
7,563 |
276 |
7,839 |
||||||
Net profit for the period |
- |
- |
203 |
203 |
7 |
210 |
||||||
Dividend |
- |
- |
(70) |
(70) |
- |
(70) |
||||||
Other comprehensive income, after tax effect |
- |
6 |
- |
6 |
- |
6 |
||||||
Temporary equity - noncontrolling interests. |
- |
- |
4 |
4 |
- |
4 |
||||||
Balance as of September 30, 2017 |
927 |
(110) |
6,889 |
7,706 |
283 |
7,989 |
||||||
For the three months ended September 30, 2016 (unaudited) |
||||||||||||
Share capital and premium(1) |
Accumulated other comprehensive loss |
Retained earnings (2) |
Total share-holders' equity |
Non- controlling interests |
Total equity |
|||||||
Balance as of June 30, 2016 |
927 |
(126) |
6,538 |
7,339 |
275 |
7,614 |
||||||
Net profit for the period |
- |
- |
128 |
128 |
4 |
132 |
||||||
Other comprehensive income (loss), after tax effect |
- |
(48) |
- |
(48) |
(2) |
(50) |
||||||
Temporary equity - noncontrolling interests. |
- |
- |
(8) |
(8) |
- |
(8) |
||||||
Balance as of September 30, 2016 |
927 |
(174) |
6,658 |
7,411 |
277 |
7,688 |
||||||
For the nine months ended September 30, 2017 (unaudited) |
||||||||||||
Share capital and premium(1) |
Accumulated other comprehensive income (loss) |
Retained earnings (2) |
Total share-holders' equity |
Non- controlling interests |
Total equity |
|||||||
Balance at the beginning of the year (audited) |
927 |
(177) |
6,571 |
7,321 |
283 |
7,604 |
||||||
Net profit for the period |
- |
- |
520 |
520 |
19 |
539 |
||||||
Dividend |
- |
- |
(210) |
(210) |
(20) |
(230) |
||||||
Other comprehensive income, after tax effect |
- |
67 |
- |
67 |
1 |
68 |
||||||
Temporary equity - noncontrolling interests. |
- |
- |
8 |
8 |
- |
8 |
||||||
Balance as of September 30, 2017 |
927 |
(110) |
6,889 |
7,706 |
283 |
7,989 |
||||||
For the nine months ended September 30, 2016 (unaudited) |
||||||||||||
Share capital and premium(1) |
Accumulated other comprehensive loss |
Retained earnings (2) |
Total share-holders' equity |
Non- controlling interests |
Total equity |
|||||||
Balance at the beginning of the year (audited) |
927 |
(105) |
6,251 |
7,073 |
264 |
7,337 |
||||||
Net profit for the period |
- |
- |
409 |
409 |
14 |
423 |
||||||
Other comprehensive income (loss), after tax effect |
- |
(69) |
- |
(69) |
(1) |
(70) |
||||||
Temporary equity - noncontrolling interests. |
- |
- |
(2) |
(2) |
- |
(2) |
||||||
Balance as of September 30, 2016 |
927 |
(174) |
6,658 |
7,411 |
277 |
7,688 |
STATEMENT OF CHANGES IN EQUITY (CONT'D)
(NIS million)
For the year ended December 31, 2016 (audited) |
||||||||||||
Share capital and premium(1) |
Accumulated other comprehensive loss |
Retained earnings (2) |
Total share-holders' equity |
Non- controlling interests |
Total equity |
|||||||
Balance at the beginning of the year |
927 |
(105) |
6,251 |
7,073 |
264 |
7,337 |
||||||
Net profit for the year |
- |
- |
521 |
521 |
21 |
542 |
||||||
Dividend |
- |
- |
(200) |
(200) |
- |
(200) |
||||||
Other comprehensive loss, after tax effect |
- |
(72) |
- |
(72) |
(2) |
(74) |
||||||
Temporary equity - noncontrolling interests. |
- |
- |
(1) |
(1) |
- |
(1) |
||||||
Balance as of December 31, 2016 |
927 |
(177) |
6,571 |
7,321 |
283 |
7,604 |
(1) Including share premium of NIS 313 million (as from 1992 onwards).
(2) Including an amount of NIS 2,391 million which cannot be distributed as dividend.
The notes to the financial statements are an integral part thereof.
Contacts:
Dafna Zucker,
Spokeswoman and IR Officer
Tel: +972-3-5196224
Tel: +972-3-5196219
Email: [email protected]
Investor Relations Contact:
Ehud Helft/Gavriel Frohwein
Tel: +1-646-688-3559
Email: [email protected]
SOURCE FIBI-First International Bank of Israel Ltd.
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