First International Bank of Israel Presents First Quarter 2019 Results
TEL AVIV, Israel, May 28, 2019 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the first quarter of 2019.
First Quarter 2019 Highlights
- 33.6% growth year-over-year in net earnings, amounting to NIS 183 million
- Return on equity: 9.3%
- Earnings from financing operations increased by 9.1% year-over-year
- Credit extended to the public increased by 2.4% in the quarter and by 5.4% over the previous year
- Ratio of Tier I equity to risk weighted assets: 10.53%
Profitability
Net profit at the First International Bank Group increased by 33.6%, compared with the first quarter of last year, and amounted to NIS 183 million. Return on equity was 9.3%. After elimination of non-recurring impacts (the expense provision related to the merger with Otsar Hachayal which amounted to NIS 4 million), the Bank return on equity was 9.5%.
Growth
Profit from financing operations increased by 9.1% in comparison with the corresponding period last year, and amounted to NIS 681 million. The growth of the Group is also demonstrated through the balance sheet data, both on the credit side and on the deposits side.
Deposits of the public increased by 3.3% compared with that of the end of 2018, amounting to NIS 115,349 million. Credit to the public, net, increased by 2.4% compared with that of the end of 2018, amounting to NIS 86,353 million. The growth in the credit portfolio was achieved while maintaining an appropriate risk level.
Efficiency
The Bank continues to improve its efficiency in accordance with its strategic outline: the efficiency ratio improved to 67.2% as compared with a ratio of 68.4% as at the end of 2018 and 74.8% in the corresponding quarter last year.
Operating and other expenses were reduced by 8.7% as compared with the corresponding quarter last year and amounted to NIS 673 million.
The first quarter of 2019, represents the first full quarter following the merger of Otzar Hachayal Bank with and into the Bank. Within this framework, a program of early retirement of employees was implemented and is expected to continue into the coming quarters. Expenses incurred in the first quarter include settlement expenses in respect of the retirement of employees, which amounted to NIS 18 million before tax.
Financial stability and dividend distribution
The Tier I equity capital ratio was 10.53%, and the comprehensive capital ratio increased to 13.77%. The Bank has a dividend distribution policy of up to 50% of net earnings, and in line with this policy, the previously announced dividend distribution payment of NIS 105 million was made in the first quarter. The dividend yield amounted to 4.5%. The Board of Directors of the Bank resolved to distribute a new dividend in respect of the first quarter results, amounting to NIS 85 million.
Ms. Smadar Berber-Tsadik CEO of the First International Bank stated that: "The first quarter was characterized by the completion of the merger with Otzar Hachayal Bank, which took effect at the start of the year and this led to a significant structural change. The results of this process, combined with additional actions that included material early retirement plans, we expect will be reflected in efficiency improvements at the Group in the coming quarters.
"In the current quarter, the Bank continued to develop and introduce innovative digital and technological products and services. Furthermore, for the first time in the Israeli banking system, the Bank performed a foreign trade transaction using 'blockchain' technology, making an API (application programming interface) accessible to our business customers as part of the early adoption of 'open banking' principles. At the same time, we continue our development and integration of the innovative 'advise.me' system, which provides investment consulting in a modern way, and attracts satisfied customers at a quicker pace."
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES | ||||||
Principal financial ratios | For the three months ended | For the year | ||||
2019 | 2018 | 2018 | ||||
in % | ||||||
Execution indices | ||||||
Return on equity attributed to shareholders of the Bank(1) | 9.3% | 7.2% | 9.3% | |||
Return on average assets(1) | 0.5% | 0.4% | 0.5% | |||
Ratio of equity capital tier 1 | 10.53% | 10.05% | 10.51% | |||
Leverage ratio | 5.71% | 5.56% | 5.76% | |||
Liquidity coverage ratio | 132% | 120% | 122% | |||
Ratio of total income to average assets(1) | 3.0% | 3.0% | 3.1% | |||
Efficiency ratio | 67.2% | 74.8% | 68.4% | |||
Credit quality indices | ||||||
Ratio of provision for credit losses to credit to the public | 1.02% | 1.02% | 1.02% | |||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public | 0.92% | 0.91% | 0.83% | |||
Ratio of provision for credit losses to total impaired credit to the public | 156% | 162% | 186% | |||
Ratio of net write-offs to average total credit to the public (1) | 0.06% | 0.08% | 0.16% | |||
Ratio of expenses for credit losses to average total credit to the public (1) | 0.17% | 0.13% | 0.20% | |||
Principal data from the statement of income | For the three months ended | |||
2019 | 2018 | |||
NIS million | ||||
Net profit attributed to shareholders of the Bank | 183 | 137 | ||
Interest Income, net | 635 | 584 | ||
Expenses from credit losses | 36 | 27 | ||
Total non-Interest income | 367 | 401 | ||
Of which: Fees | 320 | 338 | ||
Total operating and other expenses | 673 | 737 | ||
Of which: Salaries and related expenses | 402 | 446 | ||
Dismissals expenses | 18 | 3 | ||
Primary net profit per share of NIS 0.05 par value (NIS) | 1.82 | 1.37 | ||
Principal data from the balance sheet | As of | |||||
31.3.19 | 31.3.18 | 31.12.18 | ||||
NIS million | ||||||
Total assets | 136,983 | 132,636 | 134,120 | |||
of which: Cash and deposits with banks | 34,108 | 34,481 | 31,303 | |||
Securities | 11,338 | 10,471 | 12,595 | |||
Credit to the public, net | 86,353 | 81,904 | 84,292 | |||
Total liabilities | 128,445 | 124,566 | 125,707 | |||
of which: Deposits from the public | 115,349 | 111,913 | 111,697 | |||
Deposits from banks | 1,064 | 359 | 1,150 | |||
Bonds and subordinated capital notes | 4,270 | 4,980 | 4,989 | |||
Capital attributed to the shareholders of the Bank | 8,208 | 7,772 | 8,093 |
Additional data | As of | |||||
31.3.19 | 31.3.18 | 31.12.18 | ||||
Share price (0.01 NIS) | 8,642 | 7,390 | 7,860 | |||
Dividend per share (0.01 NIS) | 105 | 95 | 355 | |||
Ratio of interest income, net to average assets (in %)(1) | 1.9% | 1.8% | 1.9% | |||
Ratio of fees to average assets (in %)(1) | 0.9% | 1.0% | 1.0% | |||
(1) Annualized. | ||||||
CONSOLIDATED STATEMENT OF INCOME | ||||||
(NIS million) | ||||||
For the three months | For the year ended | |||||
2019 | 2018 | 2018 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Interest Income | 727 | 654 | 3,001 | |||
Interest Expenses | 92 | 70 | 515 | |||
Interest Income, net | 635 | 584 | 2,486 | |||
Expenses from credit losses | 36 | 27 | 166 | |||
Net Interest Income after expenses from credit losses | 599 | 557 | 2,320 | |||
Non- Interest Income | ||||||
Non Interest Financing income | 46 | 40 | 231 | |||
Fees | 320 | 338 | 1,325 | |||
Other income | 1 | 23 | 81 | |||
Total non- Interest income | 367 | 401 | 1,637 | |||
Operating and other expenses | ||||||
Salaries and related expenses | 402 | 446 | 1,696 | |||
Maintenance and depreciation of premises and equipment | 92 | 96 | 376 | |||
Amortizations and impairment of intangible assets | 23 | 23 | 91 | |||
Other expenses | 156 | 172 | 656 | |||
Total operating and other expenses | 673 | 737 | 2,819 | |||
Profit before taxes | 293 | 221 | 1,138 | |||
Provision for taxes on profit | 111 | 82 | 408 | |||
Profit after taxes | 182 | 139 | 730 | |||
The bank's share in profit of equity-basis investee, after taxes | 10 | 6 | 37 | |||
Net profit: | ||||||
Before attribution to non‑controlling interests | 192 | 145 | 767 | |||
Attributed to non‑controlling interests | (9) | (8) | (34) | |||
Attributed to shareholders of the Bank | 183 | 137 | 733 | |||
NIS | ||||||
Primary profit per share attributed to the shareholders of the Bank | ||||||
Net profit per share of NIS 0.05 par value | 1.82 | 1.37 | 7.31 | |||
The notes to the financial statements are an integral part thereof. | ||||||
STATEMENT OF COMPREHENSIVE INCOME | ||||||
(NIS million) | ||||||
For the three months | For the year ended | |||||
2019 | 2018 | 2018 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Net profit before attribution to non‑controlling interests | 192 | 145 | 767 | |||
Net profit attributed to non‑controlling interests | (9) | (8) | (34) | |||
Net profit attributed to the shareholders of the Bank | 183 | 137 | 733 | |||
Other comprehensive income (loss) before taxes: | ||||||
Adjustments of available for sale bonds (2018 - securities) to fair value, net | 66 | (42) | (102) | |||
Adjustments of liabilities in respect of employee benefits(1) | (8) | 7 | 37 | |||
Other comprehensive income (loss) before taxes | 58 | (35) | (65) | |||
Related tax effect | (20) | 11 | 22 | |||
Other comprehensive income (loss) before attribution to non‑controlling interests, after taxes | 38 | (24) | (43) | |||
Less other comprehensive income (loss) attributed to non‑controlling interests | 1 | - | (4) | |||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes | 37 | (24) | (39) | |||
Comprehensive income before attribution to non‑controlling interests | 230 | 121 | 724 | |||
Comprehensive income attributed to non‑controlling interests | (10) | (8) | (30) | |||
Comprehensive income attributed to the shareholders of the Bank | 220 | 113 | 694 | |||
(1) Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits pension plans, of | ||||||
The notes to the financial statements are an integral part thereof. | ||||||
CONSOLIDATED BALANCE SHEET | ||||||
(NIS million) | ||||||
31.3.19 | 31.3.18 | 31.12.18 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Assets | ||||||
Cash and deposits with banks | 34,108 | 34,481 | 31,303 | |||
Securities | 11,338 | 10,471 | 12,595 | |||
Securities which were borrowed | 664 | 637 | 863 | |||
Credit to the public | 87,246 | 82,745 | 85,160 | |||
Provision for Credit losses | (893) | (841) | (868) | |||
Credit to the public, net | 86,353 | 81,904 | 84,292 | |||
Credit to the government | 676 | 677 | 700 | |||
Investments in investee company | 617 | 571 | 606 | |||
Premises and equipment | 1,011 | 1,046 | 1,023 | |||
Intangible assets | 231 | 228 | 239 | |||
Assets in respect of derivative instruments | 941 | 1,189 | 1,399 | |||
Other assets(2) | 1,044 | 1,397 | 1,100 | |||
Assets held for sale | - | 35 | - | |||
Total assets | 136,983 | 132,636 | 134,120 | |||
Liabilities and Shareholders' Equity | ||||||
Deposits from the public | 115,349 | 111,913 | 111,697 | |||
Deposits from banks | 1,064 | 359 | 1,150 | |||
Deposits from the Government | 779 | 749 | 982 | |||
Bonds and subordinated capital notes | 4,270 | 4,980 | 4,989 | |||
Liabilities in respect of derivative instruments | 1,021 | 967 | 1,294 | |||
Other liabilities(1)(3) | 5,962 | 5,598 | 5,595 | |||
Total liabilities | 128,445 | 124,566 | 125,707 | |||
Capital attributed to the shareholders of the Bank | 8,208 | 7,772 | 8,093 | |||
Non‑controlling interests | 330 | 298 | 320 | |||
Total equity | 8,538 | 8,070 | 8,413 | |||
Total liabilities and shareholders' equity | 136,983 | 132,636 | 134,120 | |||
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 62 million | ||||||
(2) Of which: other assets measured at fair value in the amount of NIS 312 million and NIS 298 million and NIS 426 million at 31.3.19, | ||||||
(3) Of which: other liabilities measured at fair value in the amount of NIS 536 million and NIS 603 million and NIS 586 million at 31.3.19, | ||||||
The notes to the financial statements are an integral part thereof. | ||||||
STATEMENT OF CHANGES IN EQUITY | ||||||||||||
(NIS million) | ||||||||||||
For the three months ended March 31, 2019 (unaudited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total | |||||||
Balance as at December 31, 2018 (audited) | 927 | (159) | 7,325 | 8,093 | 320 | 8,413 | ||||||
Cumulative effect of the initial implementation of US accepted accounting | - | 8 | (8) | - | - | - | ||||||
Adjusted balance as at January 1, 2019 after the initial implementation | 927 | (151) | 7,317 | 8,093 | 320 | 8,413 | ||||||
Net profit for the period | - | - | 183 | 183 | 9 | 192 | ||||||
Dividend | - | - | (105) | (105) | - | (105) | ||||||
Other comprehensive income, after tax effect | - | 37 | - | 37 | 1 | 38 | ||||||
Balance as at March 31, 2019 | 927 | (114) | 7,395 | 8,208 | 330 | 8,538 | ||||||
For the three months ended March 31, 2018 (unaudited) | ||||||||||||
Share | Accumulated | Retained earnings (2) | Total | Non- | Total | |||||||
Balance as at December 31, 2017 (audited) | 927 | (120) | 6,949 | 7,756 | 290 | 8,046 | ||||||
Net profit for the period | - | - | 137 | 137 | 8 | 145 | ||||||
Dividend | - | - | (95) | (95) | - | (95) | ||||||
Other comprehensive loss, after tax effect | - | (24) | - | (24) | - | (24) | ||||||
Temporary equity – non‑controlling interest. | - | - | (2) | (2) | - | (2) | ||||||
Balance as at March 31, 2018 | 927 | (144) | 6,989 | 7,772 | 298 | 8,070 | ||||||
For the year ended December 31, 2018 (audited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total | |||||||
Balance as at December 31, 2017 | 927 | (120) | 6,949 | 7,756 | 290 | 8,046 | ||||||
Net profit for the year | - | - | 733 | 733 | 34 | 767 | ||||||
Dividend | - | - | (355) | (355) | - | (355) | ||||||
Other comprehensive loss, after tax effect | - | (39) | - | (39) | (4) | (43) | ||||||
Temporary equity – non‑controlling interest. | - | - | (2) | (2) | - | (2) | ||||||
Balance as at December 31, 2018 | 927 | (159) | 7,325 | 8,093 | 320 | 8,413 | ||||||
(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. | ||||||||||||
(3) Cumulative effect of the initial implementation of US banks accepted accounting principles regarding financial instruments (ASU 2016-01). | ||||||||||||
The notes to the financial statements are an integral part thereof. | ||||||||||||
Contact:
Dafna Zucker
First International Bank of Israel
e-mail: [email protected]
Tel: +972-3-519-6224
Ehud Helft
GK Investor & Public Relations
e-mail: [email protected]
Tel: +1-646-201-9246
SOURCE First International Bank of Israel
Share this article