First International Bank of Israel Presents Second Quarter 2019 Results
TEL AVIV, Israel, Aug. 13, 2019 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI), one of Israel's major banking groups, today announced its results for the second quarter and first half of 2019.
Financial Highlights
- Second quarter net earnings of NIS 224 million, a growth of 2.3% year-over-year and return on equity of 11.3%
- First half 2019 net earnings of NIS 407 million, a growth of 14.3% year-over-year and return on equity of 10.2%;
- First half 2019 earnings from financing operations increased by 9.8% to NIS 1,412 million;
- Annual growth of 4.1% in the average balance of credit extended to the public;
- Ratio of Tier I equity capital to risk assets: 10.86%;
- S&P Ma'alot and Moody's Midrug raised the credit rating of the Bank to AAA;
Profitability
In the first half of 2019, net earnings of the First International Bank Group increased by 14.3% year-over-year, amounting to NIS 407 million. Return on equity reached 10.2% as compared with 9.3% in the corresponding period last year and for the whole of 2018.
In the second quarter of 2019, net earnings amounted to NIS 224 million, an increase of 2.3% year-over-year, and return on equity reached 11.3%. After elimination of certain components in the corresponding quarter last year (a gain of NIS 33 million on the sale of assets and expenses of NIS 7 million in respect of the merger with Otzar Hachayal Bank), net earnings for the quarter increased by 16.1%.
Growth
Financing profit increased in the first half of the year by 9.8% to NIS 1,412 million, and in the second quarter of the year, increased by 7.3% in comparison with the corresponding period last year. Credit to the public, net, increased in comparison with the corresponding period last year by 3.1% (a growth of 4.1% in average balances) amounting to NIS 85,549 million. Credit loss expenses amounted to 0.14% of the amount of credit to the public, in contrast to a rate of 0.20% in the corresponding period last year.
Efficiency
The Bank continued to improve its efficiency parameters: the efficiency ratio improved to 65.9% in the first half of the year, as compared with a ratio of 68.8% in the corresponding period last year. Operating and other expenses decreased in the first half of the year by 2.9% as compared with the corresponding period last year, amounting to NIS 1,351 million.
The decrease in expenses can be seen across all the various expense items: payroll and related benefits – a decrease of 1.7%, depreciation and maintenance of buildings and equipment – a decrease of 5.3% and other expenses – a decrease of 5.6%.
Financial Stability and Dividend Distribution
The Tier I equity capital ratio reached 10.86%, and the comprehensive capital ratio reached 13.86%.
The First International Bank has a dividend distribution policy of up to 50% of net earnings, and accordingly, since the beginning of the year the Bank has distributed a dividend of NIS 190 million. The dividend yield reached 4.6%. Subsequent to the date of the financial statements the Board of Directors of the Bank resolved to distribute a further dividend in the amount of NIS 110 million.
Management Comment
Ms. Smadar Barber-Tsadik, CEO of the First International Bank stated that: "The results for the first half of the year reflect the continued trend by which we have seen for quite some time, demonstrating growth in income and reduction in expenses, with a strict maintenance of the high financial stability of the Bank. The improvement in efficiency at the Bank is the outcome of the efficiency measures which we have taken, which are being reflected gradually, mainly following the merger with Otzar Hachayal Bank and the retirement of employees under voluntary retirement plans. Given our growth and efficiency processes, as well as our high and continuous financial stability recently led to both credit rating agencies that rate the Bank, S&P Ma'alot and Midrug, to raise the deposit ratings of the Bank to a level of AAA."
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES | ||||||
Principal financial ratios | For the six months | For the year | ||||
2019 | 2018 | 2018 | ||||
in % | ||||||
Execution indices | ||||||
Return on equity attributed to shareholders of the Bank(1) | 10.2% | 9.3% | 9.3% | |||
Return on average assets(1) | 0.6% | 0.5% | 0.5% | |||
Ratio of equity capital tier 1 | 10.86% | 10.10% | 10.51% | |||
Leverage ratio | 5.92% | 5.61% | 5.76% | |||
Liquidity coverage ratio | 123% | 118% | 122% | |||
Ratio of total income to average assets(1) | 3.0% | 3.0% | 3.1% | |||
Efficiency ratio | 65.9% | 68.8% | 68.4% | |||
Credit quality indices | ||||||
Ratio of provision for credit losses to credit to the public | 1.03% | 1.03% | 1.02% | |||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public | 0.89% | 0.93% | 0.83% | |||
Ratio of provision for credit losses to total impaired credit to the public | 168% | 165% | 186% | |||
Ratio of net write-offs to average total credit to the public (1) | 0.09% | 0.11% | 0.16% | |||
Ratio of expenses for credit losses to average total credit to the public (1) | 0.14% | 0.20% | 0.20% | |||
Principal data from the statement of income | For the six months | |||
2019 | 2018 | |||
NIS million | ||||
Net profit attributed to shareholders of the Bank | 407 | 356 | ||
Interest Income, net | 1,300 | 1,199 | ||
Expenses from credit losses | 59 | 81 | ||
Total non-Interest income | 749 | 825 | ||
Of which: Fees | 635 | 663 | ||
Total operating and other expenses | 1,351 | 1,392 | ||
Of which: Salaries and related expenses | 821 | 835 | ||
Dismissals expenses | 31 | 14 | ||
Primary net profit per share of NIS 0.05 par value (NIS) | 4.06 | 3.55 | ||
Principal data from the balance sheet | As of | |||||
30.6.19 | 30.6.18 | 31.12.18 | ||||
NIS million | ||||||
Total assets | 135,067 | 134,254 | 134,120 | |||
of which: Cash and deposits with banks | 33,900 | 33,090 | 31,303 | |||
Securities | 10,587 | 11,919 | 12,595 | |||
Credit to the public, net | 85,549 | 82,951 | 84,292 | |||
Total liabilities | 126,362 | 125,989 | 125,707 | |||
of which: Deposits from the public | 113,716 | 112,555 | 111,697 | |||
Deposits from banks | 954 | 460 | 1,150 | |||
Bonds and subordinated capital notes | 4,034 | 5,012 | 4,989 | |||
Capital attributed to the shareholders of the Bank | 8,366 | 7,961 | 8,093 |
Additional data | 30.6.19 | 30.6.18 | 31.12.18 | |||
Share price (0.01 NIS) | 8,960 | 7,635 | 7,860 | |||
Dividend per share (0.01 NIS) | 190 | 155 | 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 six months | For the year | ||||||||
2019 | 2018 | 2019 | 2018 | 2018 | ||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||
Interest Income | 911 | 819 | 1,638 | 1,473 | 3,001 | |||||
Interest Expenses | 246 | 204 | 338 | 274 | 515 | |||||
Interest Income, net | 665 | 615 | 1,300 | 1,199 | 2,486 | |||||
Expenses from credit losses | 23 | 54 | 59 | 81 | 166 | |||||
Net Interest Income after expenses from credit losses | 642 | 561 | 1,241 | 1,118 | 2,320 | |||||
Non- Interest Income | ||||||||||
Non-Interest Financing income | 66 | 47 | 112 | 87 | 231 | |||||
Fees | 315 | 325 | 635 | 663 | 1,325 | |||||
Other income | 1 | 52 | 2 | 75 | 81 | |||||
Total non- Interest income | 382 | 424 | 749 | 825 | 1,637 | |||||
Operating and other expenses | ||||||||||
Salaries and related expenses | 419 | 389 | 821 | 835 | 1,696 | |||||
Maintenance and depreciation of premises | 88 | 94 | 180 | 190 | 376 | |||||
Amortizations and impairment of intangible assets | 23 | 22 | 46 | 45 | 91 | |||||
Other expenses | 148 | 150 | 304 | 322 | 656 | |||||
Total operating and other expenses | 678 | 655 | 1,351 | 1,392 | 2,819 | |||||
Profit before taxes | 346 | 330 | 639 | 551 | 1,138 | |||||
Provision for taxes on profit | 127 | 117 | 238 | 199 | 408 | |||||
Profit after taxes | 219 | 213 | 401 | 352 | 730 | |||||
The bank's share in profit of equity-basis investee, after | 14 | 13 | 24 | 19 | 37 | |||||
Net profit: | ||||||||||
Before attribution to non‑controlling interests | 233 | 226 | 425 | 371 | 767 | |||||
Attributed to non‑controlling interests | (9) | (7) | (18) | (15) | (34) | |||||
Attributed to shareholders of the Bank | 224 | 219 | 407 | 356 | 733 | |||||
NIS | ||||||||||
Primary profit per share attributed to the | ||||||||||
Net profit per share of NIS 0.05 par value | 2.24 | 2.18 | 4.06 | 3.55 | 7.31 | |||||
The notes to the financial statements are an integral part thereof. | ||||||||||
STATEMENT OF COMPREHENSIVE INCOME | ||||||||||
(NIS million) | ||||||||||
For the three | For the six months | For the year | ||||||||
2019 | 2018 | 2019 | 2018 | 2018 | ||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||
Net profit before attribution to non‑controlling interests | 233 | 226 | 425 | 371 | 767 | |||||
Net profit attributed to non‑controlling interests | (9) | (7) | (18) | (15) | (34) | |||||
Net profit attributed to the shareholders of the Bank | 224 | 219 | 407 | 356 | 733 | |||||
Other comprehensive income (loss) before taxes: | ||||||||||
Adjustments of available for sale bonds (2018 - securities) to fair value, | 10 | (28) | 76 | (70) | (102) | |||||
Adjustments of liabilities in respect of employee benefits(1) | 20 | 71 | 12 | 78 | 37 | |||||
Other comprehensive income (loss) before taxes | 30 | 43 | 88 | 8 | (65) | |||||
Related tax effect | (11) | (14) | (31) | (3) | 22 | |||||
Other comprehensive income (loss) before attribution to | 19 | 29 | 57 | 5 | (43) | |||||
Less other comprehensive income (loss) attributed to non‑controlling | - | (1) | 1 | (1) | (4) | |||||
Other comprehensive income (loss) attributed to the shareholders of the | 19 | 30 | 56 | 6 | (39) | |||||
Comprehensive income before attribution to non‑controlling interests | 252 | 255 | 482 | 376 | 724 | |||||
Comprehensive income attributed to non‑controlling interests | (9) | (6) | (19) | (14) | (30) | |||||
Comprehensive income attributed to the shareholders of the Bank | 243 | 249 | 463 | 362 | 694 | |||||
(1) 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 | |||||
2019 | 2018 | 2018 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Assets | ||||||
Cash and deposits with banks | 33,900 | 33,090 | 31,303 | |||
Securities | 10,587 | 11,919 | 12,595 | |||
Securities which were borrowed | 416 | 550 | 863 | |||
Credit to the public | 86,436 | 83,811 | 85,160 | |||
Provision for Credit losses | (887) | (860) | (868) | |||
Credit to the public, net | 85,549 | 82,951 | 84,292 | |||
Credit to the government | 684 | 681 | 700 | |||
Investments in investee company | 589 | 585 | 606 | |||
Premises and equipment | 1,001 | 1,031 | 1,023 | |||
Intangible assets | 228 | 227 | 239 | |||
Assets in respect of derivative instruments | 938 | 1,263 | 1,399 | |||
Other assets(2) | 1,175 | 1,950 | 1,100 | |||
Assets held for sale | - | 7 | - | |||
Total assets | 135,067 | 134,254 | 134,120 | |||
Liabilities and Shareholders' Equity | ||||||
Deposits from the public | 113,716 | 112,555 | 111,697 | |||
Deposits from banks | 954 | 460 | 1,150 | |||
Deposits from the Government | 466 | 613 | 982 | |||
Bonds and subordinated capital notes | 4,034 | 5,012 | 4,989 | |||
Liabilities in respect of derivative instruments | 1,104 | 1,124 | 1,294 | |||
Other liabilities(1)(3) | 6,088 | 6,225 | 5,595 | |||
Total liabilities | 126,362 | 125,989 | 125,707 | |||
Capital attributed to the shareholders of the Bank | 8,366 | 7,961 | 8,093 | |||
Non-controlling interests | 339 | 304 | 320 | |||
Total equity | 8,705 | 8,265 | 8,413 | |||
Total liabilities and shareholders' equity | 135,067 | 134,254 | 134,120 | |||
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 65 million and NIS 74 | ||||||
(2) Of which: other assets measured at fair value in the amount of NIS 543 million and NIS 1,289 million and NIS 426 million at 30.6.19, | ||||||
(3) Of which: other liabilities measured at fair value in the amount of NIS 847 million and NIS 1,485 million and NIS 586 million at | ||||||
The notes to the financial statements are an integral part thereof. | ||||||
STATEMENT OF CHANGES IN EQUITY | ||||||||||||
(NIS million) | ||||||||||||
For the three months ended June 30, 2019 (unaudited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total | |||||||
Balance as of March 31, 2019 | 927 | (114) | 7,395 | 8,208 | 330 | 8,538 | ||||||
Net profit for the period | - | - | 224 | 224 | 9 | 233 | ||||||
Dividend | - | - | (85) | (85) | - | (85) | ||||||
Other comprehensive income, after tax effect | - | 19 | - | 19 | - | 19 | ||||||
Balance as at June 30, 2019 | 927 | (95) | 7,534 | 8,366 | 339 | 8,705 | ||||||
For the three months ended June 30, 2018 (unaudited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total | |||||||
Balance as of March 31, 2018 | 927 | (144) | 6,989 | 7,772 | 298 | 8,070 | ||||||
Net profit for the period | - | - | 219 | 219 | 7 | 226 | ||||||
Dividend | - | - | (60) | (60) | - | (60) | ||||||
Other comprehensive income (loss), after tax effect | - | 30 | - | 30 | (1) | 29 | ||||||
Balance as at June 30, 2018 | 927 | (114) | 7,148 | 7,961 | 304 | 8,265 | ||||||
For the six months ended June 30, 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 | - | 8 | (8) | - | - | - | ||||||
Adjusted balance as at January 1, 2019 after the initial | 927 | (151) | 7,317 | 8,093 | 320 | 8,413 | ||||||
Net profit for the period | - | - | 407 | 407 | 18 | 425 | ||||||
Dividend | - | - | (190) | (190) | - | (190) | ||||||
Other comprehensive income, after tax effect | - | 56 | - | 56 | 1 | 57 | ||||||
Balance as at June 30, 2019 | 927 | (95) | 7,534 | 8,366 | 339 | 8,705 | ||||||
For the six months ended June 30, 2018 (unaudited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total | |||||||
Balance as at December 31, 2017 (audited) | 927 | (120) | 6,949 | 7,756 | 290 | 8,046 | ||||||
Net profit for the period | - | - | 356 | 356 | 15 | 371 | ||||||
Dividend | - | - | (155) | (155) | - | (155) | ||||||
Other comprehensive income (loss), after tax effect | - | 6 | - | 6 | (1) | 5 | ||||||
Temporary equity – non-controlling interest | - | - | (2) | (2) | - | (2) | ||||||
Balance as at June 30, 2018 | 927 | (114) | 7,148 | 7,961 | 304 | 8,265 | ||||||
STATEMENT OF CHANGES IN EQUITY (CONT'D) | ||||||||||||
(NIS million) | ||||||||||||
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 regarding financial instruments of US accepted accounting standards at banks in | ||||||||||||
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
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