First International Bank of Israel Presents Second Quarter 2018 Results
TEL AVIV, Israel, Aug. 15, 2018 /PRNewswire/ --
Highlights of the Second Quarter & First Half of 2018
- Net profit of NIS 219 million for the quarter, growth of 45% year-over-year;
- Return on equity for the quarter: 11.7%;
- Net profit of NIS 356 million for the first half of 2018, growth of 12.3% over the first half of last year;
- Return on equity for the first half of the year: 9.3%;
- Growth of 9.5% year-over-year in financing income from current operations for the quarter;
- The efficiency ratio improved: 68.8% in the first half of 2018, versus 69.2% in the corresponding period last year;
- The ratio of Tier I equity capital to risk assets amounted to 10.10%;
- The comprehensive capital ratio amounted to 13.35%;
Management Comment
Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group (TASE: FTIN): "The results of the First International Group for the first half of 2018 reflect the ongoing implementation of the Bank's strategy over the past number of quarters. It shows continued growth while focusing on the target markets of the Bank, combined with consistent and gradual implementation of efficiency measures. Our growth was driven by the combination of the Bank's high level of professionalism and service, built on technological and digital progress. Furthermore, the Bank strictly maintains a high level of financial stability by holding extensive capital cushions as well as high quality assets."
Summary of the Results
Profitability
The financial results for the second quarter of 2018 reflected a net profit of NIS 219 million, a growth of 45% as compared with the corresponding quarter last year. Return on equity reached 11.7%.
After elimination of items of a nonrecurring nature, as detailed in the table presented below, net profit recorded growth of 27.8% and return on equity reached 10.2%, in comparison with 8.3% for the corresponding quarter of last year.
Net profit for the first half of 2018 amounted to NIS 356 million, representing growth of 12.3%. After elimination of items of a nonrecurring nature, as detailed in the Table presented below, net profit amounted to NIS 362 million, a growth of 25.3% over the corresponding half of last year.
Return on equity in the first half of the year amounted to 9.3%, and with the elimination of the items stated below – amounted to 9.5% in comparison to 8% in the corresponding period last year.
Table: Profitability after elimination of items of a nonrecurring nature
Three months ended June 30, |
Six months ended June 30, |
||||||||
2018 |
2017 |
2018 |
2017 |
||||||
In NIS millions |
|||||||||
Net profit attributed to shareholders of the |
219 |
151 |
356 |
317 |
|||||
With the elimination of: |
|||||||||
Gain on sale of the building in Switzerland |
- |
- |
(13) |
- |
|||||
Gain of sale of rights of Otzar Hachayal in the |
(33) |
- |
(33) |
- |
|||||
Gain on sale of an office building in Tel Aviv |
- |
- |
- |
(28) |
|||||
Provision for an award claim by employees |
- |
- |
29 |
- |
|||||
Provision for efficiency measures at a |
7 |
- |
23 |
- |
|||||
Net profit attributed to shareholders of the |
193 |
151 |
362 |
289 |
|||||
Return on equity |
10.2% |
8.3% |
9.5% |
8.0 |
Growth
Financing profit from current operations (net interest income and non-interest financing income) increased in the second quarter of 2018 by 9.5% in comparison with the corresponding quarter last year, and amounted to NIS 647 million, as a result of the growth in volume of operations.
Credit to the public as of June 30, 2018 was NIS 82,951 million, 4.8% higher than that of the corresponding date last year, 3.2% higher than that of December 31, 2017 and 1.3% higher than that of March 31, 2018.
The growth in credit was marked by the continuing spread of credit, and growth was mainly noted in the following credit segments (in relation to that of June 30, 2017):
- Households and private banking 9.7% (4.5% in the first half of the year)
- Middle market businesses 10.5% (3.6% in the first half of the year)
- Small businesses 8.2% (7.1% in the first half of the year)
Customer asset portfolio (deposits and securities) as of June 30, 2018, amounted to NIS 440 billion, 13% higher than that of the corresponding date last year.
Efficiency and Stability
The efficiency ratio improved to 68.8% in the first half of 2018, compared with 69.5% in the corresponding period in 2017.
Equity attributed to the shareholders of the Bank, continued its upward trend, reaching NIS 7,961 million as of June 30, 2018, 5.3% higher than that of June 30, 2017.
The ratio of Tier I equity capital reached 10.10%, and the ratio of comprehensive capital reached 13.35%.
The Board of Directors of the Bank resolved on a dividend distribution of NIS 100 million.
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES
Principal financial ratios |
For the six months |
For the |
||||
2018 |
2017 |
2017 |
||||
in % |
||||||
Execution indices |
||||||
Return on equity (1) |
9.3% |
8.7% |
9.1% |
|||
Return on assets (1) |
0.5% |
0.5% |
0.5% |
|||
Ratio of equity capital tier 1 |
10.10% |
10.25% |
10.38% |
|||
Leverage ratio |
5.61% |
5.63% |
5.50% |
|||
Liquidity coverage ratio |
118% |
125% |
123% |
|||
Efficiency ratio |
68.8% |
69.2% |
69.5% |
|||
Efficiency ratio excluding certain components (see below) |
67.0% |
70.8% |
70.0% |
|||
Credit quality indices |
||||||
Ratio of provision for credit losses to credit to the public |
1.03% |
1.06% |
1.03% |
|||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public |
0.93% |
1.20% |
0.95% |
|||
Ratio of provision for credit losses to total impaired credit to the public |
165% |
112% |
155% |
|||
Ratio of net write-offs to average total credit to the public (1) |
0.11% |
0.23% |
0.18% |
|||
Ratio of expenses for credit losses to average total credit to the public (1) |
0.20% |
0.22% |
0.15% |
Principal data from the statement of income |
For the six months |
|||
2018 |
2017 |
|||
NIS million |
||||
Net profit attributed to shareholders of the Bank |
356 |
317 |
||
Interest Income, net |
1,199 |
1,145 |
||
Expenses from credit losses |
81 |
87 |
||
Total non-Interest income |
825 |
739 |
||
Of which: Fees |
663 |
651 |
||
Total operating and other expenses |
*1,392 |
1,304 |
||
Of which: Salaries and related expenses |
*835 |
797 |
||
Primary net profit per share of NIS 0.05 par value (NIS) |
3.55 |
3.16 |
||
* Including provision in respect of claims by the Bank employees for an award, following the implications of a court verdict |
Principal data from the balance sheet |
As of |
|||||
30.6.18 |
30.6.17 |
31.12.17 |
||||
NIS million |
||||||
Total assets |
134,254 |
128,836 |
135,717 |
|||
of which: Cash and deposits with banks |
33,090 |
30,969 |
39,186 |
|||
Securities |
11,919 |
13,047 |
10,238 |
|||
Credit to the public, net |
82,951 |
79,119 |
80,378 |
|||
Total liabilities |
125,989 |
120,661 |
127,333 |
|||
of which: Deposits from banks |
460 |
746 |
1,133 |
|||
Deposits from the public |
112,555 |
107,280 |
113,511 |
|||
Bonds and subordinated capital notes |
5,012 |
5,070 |
5,249 |
|||
Capital attributed to the shareholders of the Bank |
7,961 |
7,563 |
7,756 |
Additional data |
As of |
|||||
30.6.18 |
30.6.17 |
31.12.17 |
||||
Share price (0.01 NIS) |
7,635 |
6,326 |
7,202 |
|||
Dividend per share (NIS) |
155 |
140 |
310 |
|||
Ratio of fees to assets (in %)(1) |
1.0% |
1.0% |
1.0% |
|||
(1) Annualized. |
CONSOLIDATED STATEMENT OF INCOME
(NIS million)
For the three months |
For the six months |
For the year |
||||||||||
NOTE |
2018 |
2017 |
2018 |
2017 |
2017 |
|||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||||
Interest Income |
2 |
819 |
753 |
1,473 |
1,393 |
2,704 |
||||||
Interest Expenses |
2 |
204 |
170 |
274 |
248 |
402 |
||||||
Interest Income, net |
615 |
583 |
1,199 |
1,145 |
2,302 |
|||||||
Expenses from credit losses |
6,12 |
54 |
53 |
81 |
87 |
121 |
||||||
Net Interest Income after expenses from credit losses |
561 |
530 |
1,118 |
1,058 |
2,181 |
|||||||
Non- Interest Income |
||||||||||||
Non Interest Financing income |
3 |
47 |
21 |
87 |
33 |
83 |
||||||
Fees |
325 |
317 |
663 |
651 |
1,305 |
|||||||
Other income |
52 |
13 |
75 |
55 |
62 |
|||||||
Total non- Interest income |
424 |
351 |
825 |
739 |
1,450 |
|||||||
Operating and other expenses |
||||||||||||
Salaries and related expenses |
389 |
*394 |
835 |
*797 |
*1,579 |
|||||||
Maintenance and depreciation of premises and equipment |
94 |
94 |
190 |
193 |
380 |
|||||||
Amortizations and impairment of intangible assets |
22 |
22 |
45 |
45 |
94 |
|||||||
Other expenses |
150 |
*140 |
322 |
*269 |
*554 |
|||||||
Total operating and other expenses |
655 |
650 |
1,392 |
1,304 |
2,607 |
|||||||
Profit before taxes |
330 |
231 |
551 |
493 |
1,024 |
|||||||
Provision for taxes on profit |
117 |
86 |
199 |
183 |
358 |
|||||||
Profit after taxes |
213 |
145 |
352 |
310 |
666 |
|||||||
The bank's share in profit of equity-basis investee, after taxes |
13 |
16 |
19 |
26 |
54 |
|||||||
Net profit: |
||||||||||||
Before attribution to noncontrolling interests |
226 |
161 |
371 |
336 |
720 |
|||||||
Attributed to noncontrolling interests |
(7) |
(10) |
(15) |
(19) |
(42) |
|||||||
Attributed to shareholders of the Bank |
219 |
151 |
356 |
317 |
678 |
|||||||
NIS |
||||||||||||
Primary profit per share attributed to the |
||||||||||||
Net profit per share of NIS 0.05 par value |
2.18 |
1.51 |
3.55 |
3.16 |
6.76 |
|||||||
(2) * Restated in view of the application of amendment No. 2017-07 of the Codification, regarding improvement of the |
||||||||||||
(3) |
||||||||||||
(4) The notes to the financial statements are an integral part thereof. |
||||||||||||
STATEMENT OF COMPREHENSIVE INCOME(1)
(NIS million)
For the three |
For the six months |
For the year Ended |
||||||||
2018 |
2017 |
2018 |
2017 |
2017 |
||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||
Net profit before attribution to noncontrolling interests |
226 |
161 |
371 |
336 |
720 |
|||||
Net profit attributed to noncontrolling interests |
(7) |
(10) |
(15) |
(19) |
(42) |
|||||
Net profit attributed to the shareholders of the Bank |
219 |
151 |
356 |
317 |
678 |
|||||
Other comprehensive income (loss) before taxes: |
||||||||||
Adjustments of available for sale securities to fair value, net |
(28) |
33 |
(70) |
65 |
90 |
|||||
Adjustments from translation of financial statements(1) net after the effect of hedges(2) |
- |
- |
- |
- |
4 |
|||||
Adjustments of liabilities in respect of employee benefits(3) |
71 |
10 |
78 |
34 |
1 |
|||||
Other comprehensive income before taxes |
43 |
43 |
8 |
99 |
95 |
|||||
Related tax effect |
(14) |
(16) |
(3) |
(35) |
(35) |
|||||
Other comprehensive income before attribution to noncontrolling interests, after taxes |
29 |
27 |
5 |
64 |
60 |
|||||
Less other comprehensive income (loss) attributed to noncontrolling interests |
(1) |
1 |
(1) |
3 |
3 |
|||||
Other comprehensive income attributed to the shareholders of the Bank, after taxes |
30 |
26 |
6 |
61 |
57 |
|||||
Comprehensive income before attribution to noncontrolling interests |
255 |
188 |
376 |
400 |
780 |
|||||
Comprehensive income attributed to noncontrolling interests |
(6) |
(11) |
(14) |
(22) |
(45) |
|||||
Comprehensive income attributed to the shareholders of the Bank |
249 |
177 |
362 |
378 |
735 |
|||||
See note 4. |
||||||||||
Adjustments from translation of financial statements of foreign operations which their currency of operations is different from |
||||||||||
Hedges-gains (losses) regarding the hedging of investment in foreign currency. |
||||||||||
Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits pension |
||||||||||
The notes to the financial statements are an integral part thereof. |
CONSOLIDATED BALANCE SHEET
(NIS million)
June 30, |
December |
|||||||
2018 |
2017 |
2017 |
||||||
NOTE |
(unaudited) |
(unaudited) |
(audited) |
|||||
Assets |
||||||||
Cash and deposits with banks |
33,090 |
30,969 |
39,186 |
|||||
Securities |
5 |
11,919 |
13,047 |
10,238 |
||||
Securities which were borrowed |
550 |
903 |
813 |
|||||
Credit to the public |
6 |
83,811 |
79,964 |
81,216 |
||||
Provision for Credit losses |
6 |
(860) |
(845) |
(838) |
||||
Credit to the public, net |
82,951 |
79,119 |
80,378 |
|||||
Credit to the government |
681 |
646 |
675 |
|||||
Investments in investee company |
585 |
535 |
565 |
|||||
Premises and equipment |
1,031 |
1,105 |
1,095 |
|||||
Intangible assets |
227 |
232 |
235 |
|||||
Assets in respect of derivative instruments |
10 |
1,263 |
1,295 |
1,342 |
||||
Other assets(2) |
1,950 |
968 |
1,186 |
|||||
Assets held for sale |
7 |
17 |
4 |
|||||
Total assets |
134,254 |
128,836 |
135,717 |
|||||
Liabilities, temporary equity and Shareholders' Equity |
||||||||
Deposits from the public |
7 |
112,555 |
107,280 |
113,511 |
||||
Deposits from banks |
460 |
746 |
1,133 |
|||||
Deposits from the Government |
613 |
1,038 |
960 |
|||||
Bonds and subordinated capital notes |
5,012 |
5,070 |
5,249 |
|||||
Liabilities in respect of derivative instruments |
10 |
1,124 |
1,341 |
1,318 |
||||
Other liabilities(1)(3) |
6,225 |
5,170 |
5,162 |
|||||
Liabilities held for sale |
- |
16 |
- |
|||||
Total liabilities |
125,989 |
120,661 |
127,333 |
|||||
Temporary equity – non-controlling interests |
- |
336 |
338 |
|||||
Capital attributed to the shareholders of the Bank |
7,961 |
7,563 |
7,756 |
|||||
Noncontrolling interests |
304 |
276 |
290 |
|||||
Total equity |
8,265 |
7,839 |
8,046 |
|||||
Total liabilities, temporary equity and shareholders' equity |
134,254 |
128,836 |
135,717 |
|||||
(5) |
||||||||
(6) (1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 74 million |
||||||||
(7) (2) Of which: other assets measured at fair value in the amount of NIS 1,289 million and NIS 341 million and NIS 423 |
||||||||
(8) (3) Of which: other liabilities measured at fair value in the amount of NIS 1,485 million and NIS 577 million and NIS 521 |
||||||||
(9) |
||||||||
(10) The notes to the financial statements are an integral part thereof. |
Contacts:
Company Dafna Zucker Spokeswoman and IR Officer FIBI Tel: +972-3-5196219 Email: [email protected]
|
Investor Relations Ehud Helft/Gavriel Frohwein Investor Relations Tel: +1-646-688-3559
|
SOURCE FIBI-First International Bank of Israel Ltd.
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