First International Bank of Israel Presents First Quarter 2021 Results
TEL AVIV, Israel, May 26, 2021 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the first quarter of 2021, ending March 31, 2021.
Financial Highlights of the First Quarter 2021:
- Net earnings of NIS 287 million;
- Return on equity 13.0%;
- Growth of 1.5% in net credit to the public in the first quarter;
- The Bank continued to strengthen its operations in the capital markets and in investment consultation leading to growth of 5.7% in the customer assets portfolio (deposits and securities);
- Volume of loan repayment deferrals due to the Corona crisis is in a sharp decline: ratio of deferred debts to total credit was 0.5% as compared to 1.9% at the end of 2020;
- The Bank maintains its security cushions against credit losses, created during the Corona period;
- Continued efficiency improvements: Efficiency ratio improved to 60.4%;
- Ratio of Tier I equity to risk components – 11.55%;
Profitability
First quarter 2021 net earnings of the First International Bank Group amounted to NIS 287 million, as compared to NIS 171 million in the corresponding quarter last year, a growth of 67.8%. Return on equity reached 13%, in comparison to 8.2% in the corresponding period of last year.
Growth and efficiency
The total income of the Bank grew by 6% in the first quarter of the year, compared the corresponding period of last year.
Net interest income totaled NIS 670 million, an increase of 1.8%, as compared to the corresponding quarter of last year, driven by growth in the volume of operations. The total financing income amounted to NIS 721 million, an increase of 10.1%, as compared to the corresponding quarter of last year and was due to the increase in gains on investment in securities, and an increase in the volume of operations.
The growth in the Group's operations was also evident within the balance sheet data: net credit to the public at the end of the first quarter of 2021 was NIS 92.3 billion, representing an increase of 1.5% in the quarter and 2.8% in the past year. The growth was characterized by a continued diversity of credit. This was evident in the corporate business sector, which increased by 2.5% in the quarter; middle market businesses, which increased by 1.8%; housing loans, which increased by 2.6%; and the household sector, which increased by 1.7%.
The Bank continued to strengthen its operations in the capital markets and investment consulting. The customer assets portfolio (deposits and securities) amounted to NIS 560 billion, an increase of 5.6% in the quarter and 38.2% in the past year. Deposits from the public increased by 3.5% in the quarter and 15.5% in the past year. The balance as of March 31, 2021, was NIS 146.6 billion.
The First International Bank continued to improve efficiencies in accordance with its strategic plan. The efficiency ratio improved to 60.4% in the first quarter of 2021, as compared to 61.8% for 2020.
Financial stability
The upward trend in the capital attributable to the shareholders of the Bank continued and in the quarter increased by 3.7% (or NIS 337 million) to NIS 9,478 million. The Tier I equity ratio increased to 11.55%, versus the required regulatory ratio of 8.28%.
Credit losses
Income in respect of credit losses in the first quarter of the year amounted to NIS 9 million, as compared to expenses in the amount of NIS 157 million in the corresponding period of last year. Income in respect of credit losses, recorded in the first three months of the year was due to a decrease in the collective provision, mostly because of improvements in macro-economic indices as well as in indicators representing the level of risk inherent in the Bank's credit portfolio as related to the Corona crisis.
In total during 2020, the Bank set aside provisions amounting to NIS 436 million due to the Corona, of which a total of only NIS 9 million has been released, as stated previously.
The Bank maintained its ratio of the balance of provision for credit losses to total credit to the public. The rate of the provision for credit losses to the total balance of credit to the public was 1.44% at the end of the quarter, as compared to 1.48% at the end of 2020, a ratio which reflects the maintenance of security cushions created during the Corona period.
The volume of debt repayments that had been deferred due to the Corona crisis showed a sharp downward trend, an indication of the quality of the credit portfolio and the quality of the Bank's borrowers. The ratio of deferred debts to total credit to the public at the end of March 2021 amounted to 0.5%, as compared to 1.9% as at the end of December 2020.
Management Comment
Ms. Smadar Barber-Tsadik CEO of the First International Bank Group commented that, "Our financial results for the first quarter of the year are the result of the continued strategic moves we have made focusing on growth, efficiency and innovation."
"The Bank continued to introduce digital innovations into its operations, a field in which we made an additional leap forward during the Corona year, with the aim of providing optimal service to our customers. In the reported quarter, the Bank entered the world of digital wallets with the introduction of FibiPay – an electronic wallet for customers of the First International Bank with Android cell phones, as well as with ApplePay – Apple's wallet for iPhones owners.
"During the first quarter, the State of Israel began showing the first signs of recovery from the Corona pandemic due to the successful vaccination process, which also had a positive impact on the results of the First International Bank. Notwithstanding, the Bank strictly maintains its security cushions for credit losses, in view of the uncertainty, the high unemployment rates in Israel, the impact of the security situation as well as the pandemic situation which remains in large parts of the world. As a vital institution, throughout the crisis we maintained continued service, while at the same time adapting our solutions and services offered to customers, and offering assistance to private and business customers by staying loan repayments and granting loans through State funds. As of the end of the quarter, the volume of loan repayment deferrals showed a sharp downward trend, indicating the quality of our credit portfolio and that of our borrowers, as well as pointing to the recovery of the local economy."
Condensed principal financial information and principal execution indices
Principal financial ratios | For the three months ended | For the year | ||||
2021 | 2020 | 2020 | ||||
in % | ||||||
Execution indices | ||||||
Return on equity attributed to shareholders of the Bank(1) | 13.0% | 8.2% | 8.6% | |||
Return on average assets(1) | 0.68% | 0.49% | 0.49% | |||
Ratio of equity capital tier 1 | 11.55% | 10.28% | 11.18% | |||
Leverage ratio | 5.31% | 5.52% | 5.29% | |||
Liquidity coverage ratio | 140% | 130% | 150% | |||
Ratio of total income to average assets(1) | 2.6% | 3.0% | 2.7% | |||
Ratio of interest income, net to average assets (1) | 1.6% | 1.9% | 1.7% | |||
Ratio of fees to average assets (1) | 0.9% | 1.1% | 0.9% | |||
Efficiency ratio | 60.4% | 62.2% | 61.8% | |||
Credit quality indices | ||||||
Ratio of provision for credit losses to credit to the public | 1.35% | 1.15% | 1.38% | |||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public | 0.88% | 1.07% | 0.86% | |||
Ratio of provision for credit losses to total impaired credit to the public | 204% | 146% | 221% | |||
Ratio of net write-offs to average total credit to the public (1) | 0.03% | 0.15% | 0.10% | |||
Ratio of expenses (income) for credit losses to average total credit to the public (1) | (0.04%) | 0.71% | 0.52% | |||
Principal data from the statement of income | For the three months ended | |||
2021 | 2020 | |||
NIS million | ||||
Net profit attributed to shareholders of the Bank | 287 | 171 | ||
Interest Income, net | 670 | 658 | ||
Expenses (income) from credit losses | (9) | 157 | ||
Total non-Interest income | 416 | 366 | ||
Of which: Fees | 361 | 368 | ||
Total operating and other expenses | 656 | 637 | ||
Of which: Salaries and related expenses | 398 | 379 | ||
Dismissals expenses | 3 | 2 | ||
Primary net profit per share of NIS 0.05 par value (NIS) | 2.86 | 1.70 | ||
Principal data from the balance sheet | As of | |||||
31.3.21 | 31.3.20 | 31.12.20 | ||||
NIS million | ||||||
Total assets | 172,475 | 149,531 | 167,778 | |||
of which: Cash and deposits with banks | 59,471 | 41,933 | 57,802 | |||
Securities | 14,705 | 10,824 | 13,105 | |||
Credit to the public, net | 92,321 | 90,028 | 90,970 | |||
Total liabilities | 162,590 | 140,624 | 158,243 | |||
of which: Deposits from the public | 146,600 | 126,977 | 141,677 | |||
Deposits from banks | 3,326 | 1,129 | 2,992 | |||
Bonds and subordinated capital notes | 3,716 | 3,754 | 4,394 | |||
Capital attributed to the shareholders of the Bank | 9,478 | 8,542 | 9,141 |
Additional data | As of | |||||
31.3.21 | 31.3.20 | 31.12.20 | ||||
Share price (0.01 NIS) | 9,313 | 8,676 | 8,514 | |||
Dividend per share (0.01 NIS) | - | 125 | 125 | |||
(1) Annualized.
CONSOLIDATED STATEMENT OF INCOME
(NIS million)
For the three months | For the year | |||||
2021 | 2020 | 2020 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Interest Income | 729 | 715 | 2,878 | |||
Interest Expenses | 59 | 57 | 241 | |||
Interest Income, net | 670 | 658 | 2,637 | |||
Expenses (income) from credit losses | (9) | 157 | 464 | |||
Net Interest Income after expenses from credit losses | 679 | 501 | 2,173 | |||
Non- Interest Income | ||||||
Non-Interest Financing income (expenses) | 51 | (3) | 148 | |||
Fees | 361 | 368 | 1,371 | |||
Other income | 4 | 1 | 4 | |||
Total non- Interest income | 416 | 366 | 1,523 | |||
Operating and other expenses | ||||||
Salaries and related expenses | 398 | 379 | 1,532 | |||
Maintenance and depreciation of premises and equipment | 85 | 86 | 344 | |||
Amortizations and impairment of intangible assets | 26 | 24 | 96 | |||
Other expenses | 147 | 148 | 597 | |||
Total operating and other expenses | 656 | 637 | 2,569 | |||
Profit before taxes | 439 | 230 | 1,127 | |||
Provision for taxes on profit | 153 | 48 | 368 | |||
Profit after taxes | 286 | 182 | 759 | |||
The bank's share in profit (loss) of equity-basis investee, after taxes | 13 | (2) | 29 | |||
Net profit: | ||||||
Before attribution to non–controlling interests | 299 | 180 | 788 | |||
Attributed to non–controlling interests | (12) | (9) | (38) | |||
Attributed to shareholders of the Bank | 287 | 171 | 750 | |||
NIS | ||||||
Primary profit per share attributed to the shareholders of the Bank | ||||||
Net profit per share of NIS 0.05 par value | 2.86 | 1.70 | 7.48 | |||
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 | |||||
2021 | 2020 | 2020 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Net profit before attribution to non–controlling interests | 299 | 180 | 788 | |||
Net profit attributed to non–controlling interests | (12) | (9) | (38) | |||
Net profit attributed to the shareholders of the Bank | 287 | 171 | 750 | |||
Other comprehensive income (loss) before taxes: | ||||||
Adjustments of available for sale bonds to fair value, net | 11 | (247) | (4) | |||
Adjustments of liabilities in respect of employee benefits(1) | 66 | 139 | (74) | |||
Other comprehensive income (loss) before taxes | 77 | (108) | (78) | |||
Related tax effect | (26) | 36 | 26 | |||
Other comprehensive income (loss) before attribution to non–controlling interests, after taxes | 51 | (72) | (52) | |||
Less other comprehensive income attributed to non–controlling interests | 1 | - | - | |||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes | 50 | (72) | (52) | |||
Comprehensive income before attribution to non–controlling interests | 350 | 108 | 736 | |||
Comprehensive income attributed to non–controlling interests | (13) | (9) | (38) | |||
Comprehensive income attributed to the shareholders of the Bank | 337 | 99 | 698 | |||
(1) 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 income.
The notes to the financial statements are an integral part thereof.
CONSOLIDATED BALANCE SHEET
(NIS million)
31.3.21 | 31.3.20 | 31.12.20 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Assets | ||||||
Cash and deposits with banks | 59,471 | 41,933 | 57,802 | |||
Securities | 14,705 | 10,824 | 13,105 | |||
Securities which were borrowed | 244 | 82 | 11 | |||
Credit to the public | 93,581 | 91,075 | 92,247 | |||
Provision for Credit losses | (1,260) | (1,047) | (1,277) | |||
Credit to the public, net | 92,321 | 90,028 | 90,970 | |||
Credit to the government | 659 | 1,114 | 656 | |||
Investments in investee company | 648 | 603 | 636 | |||
Premises and equipment | 954 | 989 | 965 | |||
Intangible assets | 265 | 246 | 272 | |||
Assets in respect of derivative instruments | 1,603 | 2,551 | 1,897 | |||
Other assets(2) | 1,605 | 1,161 | 1,464 | |||
Total assets | 172,475 | 149,531 | 167,778 | |||
Liabilities and Shareholders' Equity | ||||||
Deposits from the public | 146,600 | 126,977 | 141,677 | |||
Deposits from banks | 3,326 | 1,129 | 2,992 | |||
Deposits from the Government | 694 | 553 | 459 | |||
Bonds and subordinated capital notes | 3,716 | 3,754 | 4,394 | |||
Liabilities in respect of derivative instruments | 1,554 | 2,586 | 2,314 | |||
Other liabilities(1)(3) | 6,700 | 5,625 | 6,407 | |||
Total liabilities | 162,590 | 140,624 | 158,243 | |||
Capital attributed to the shareholders of the Bank | 9,478 | 8,542 | 9,141 | |||
Non–controlling interests | 407 | 365 | 394 | |||
Total equity | 9,885 | 8,907 | 9,535 | |||
Total liabilities and shareholders' equity | 172,475 | 149,531 | 167,778 |
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 88 million and NIS 64 million and NIS 86 million at 31.3.21, 31.3.20 and 31.12.20, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 375 million and NIS 78 million and NIS 247 million at 31.3.21, 31.3.20 and 31.12.20, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 375 million and NIS 111 million and NIS 258 million at 31.3.21, 31.3.20 and 31.12.20, respectively.
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, 2021 (unaudited) | ||||||||||||
Share | Accumulated | Retained earnings (2) | Total | Non- | Total equity | |||||||
Balance as at December 31, 2020 (audited) | 927 | (183) | 8,397 | 9,141 | 394 | 9,535 | ||||||
Net profit for the period | - | - | 287 | 287 | 12 | 299 | ||||||
Other comprehensive income, net after tax effect | - | 50 | - | 50 | 1 | 51 | ||||||
Balance as at March 31, 2021 | 927 | (133) | 8,684 | 9,478 | 407 | 9,885 | ||||||
For the three months ended March 31, 2020 (unaudited) | ||||||||||||
Share | Accumulated | Retained earnings (2) | Total | Non- | Total equity | |||||||
Balance as at December 31, 2019 (audited) | 927 | (131) | 7,772 | 8,568 | 356 | 8,924 | ||||||
Net profit for the period | - | - | 171 | 171 | 9 | 180 | ||||||
Dividend | - | - | (125) | (125) | - | (125) | ||||||
Other comprehensive loss, net after tax effect | - | (72) | - | (72) | - | (72) | ||||||
Balance as at March 31, 2020 | 927 | (203) | 7,818 | 8,542 | 365 | 8,907 | ||||||
For the year ended December 31, 2020 (audited) | ||||||||||||
Share | Accumulated | Retained earnings (2) | Total | Non- | Total equity | |||||||
Balance as at December 31, 2019 | 927 | (131) | 7,772 | 8,568 | 356 | 8,924 | ||||||
Net profit for the year | - | - | 750 | 750 | 38 | 788 | ||||||
Dividend | - | - | (125) | (125) | - | (125) | ||||||
Other comprehensive loss, after tax effect | - | (52) | - | (52) | - | (52) | ||||||
Balance as at December 31, 2020 | 927 | (183) | 8,397 | 9,141 | 394 | 9,535 | ||||||
(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
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: +1-646-201-924
SOURCE First International Bank of Israel
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