First International Bank of Israel Presents Third Quarter 2019 Results
TEL AVIV, Israel, Nov. 26, 2019 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the third quarter and first nine months of 2019.
Third Quarter 2019 Highlights
- Q3 net earnings of NIS 236 million, growth of 11.3% year-over-year;
- Return on Equity: 11.7%;
First Nine Months of 2019 Highlights
- Net earnings increased by 13.2% to NIS 643 million year-over-year;
- Return on Equity: 10.6%;
- Efficiency ratio improved to 64.9% versus 67.7% last year;
- Growth of 3.6% in credit to the public as from beginning of 2019;
- Ratio of Tier I equity capital to risk assets: 10.79%
Profitability
First International Bank Group's third quarter net earnings amounted to NIS 236 million, an increase of 11.3% over the third quarter of last year representing a return on equity – 11.7%.
In the first nine months of the year, net earnings increased by 13.2% to NIS 643 million, while return on equity reached 10.6%.
Growth
Credit to the public, net, increased by 3.6% as of the start of 2019 (i.e. as compared with the end of 2018) and amounted to NIS 87,310 million. The growth in credit is highlighted across all the segments of operation: private customers – 3.9%, small and middle market businesses – 2.1%, and large businesses – 4%.
The ratio of credit loss expenses to average balance of credit to the public, amounted to 0.14%, compared with a ratio of 0.21% in the corresponding period of last year.
Financing profit, net, increased in the first nine months of the year by 4.4% and amounted to NIS 2,117 million. Financing profit from current operations increased by 6.9% and amounted to NIS 2,060 million.
Efficiency
The Bank continues to improve its efficiency: the efficiency ratio improved to 64.9% compared with 67.7% in the corresponding period last year and compared to 68.4% in 2018. Operating and other expenses decreased in the first nine months of the year by 4.4% versus the corresponding period last year, and amounted to NIS 2 billion. The reduction in expenses can be seen across the various expense items: payroll and related benefits – a reduction of 2%, depreciation and maintenance of buildings and equipment – a reduction of 5%.
Financial stability and dividend distribution
The Tier I equity capital ratio amounted to 10.79%, and the comprehensive capital ratio amounted to 13.71%.
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 total dividends amounting to NIS 300 million. This represents a dividend yield of 4.6%.
Subsequent to the date of the financial statements, the Board of Directors of the Bank has 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 financial results of the Bank reflect the continuation of the process we have led at the Bank, a process of which the essence is growth and efficiency. The results of our merger with Otzar Hachayal Bank, which is one of the key moves that we have recently taken has begun to show its effect both with respect to cost savings and to growth across our areas of operations. Additional significant moves we have made at the Bank are the intensification of capital market operations, a continuation of the consistent and continuing growth trends in credit, as well as developments in the digital field. This has enabled us to offer our customers with a personal and professional service, alongside an innovative and advanced digital service. We have implemented improvements to our digital strategy and IT infrastructure to improve our competitiveness, enabling us to provide an efficient service and continuing growth."
CONSOLIDATED STATEMENT OF INCOME | ||||||||||
(NIS million) | ||||||||||
For the three months | For the nine months | For the year Ended | ||||||||
2019 | 2018 | 2019 | 2018 | 2018 | ||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||
Interest Income | 699 | 756 | 2,337 | 2,229 | 3,001 | |||||
Interest Expenses | 57 | 122 | 395 | 396 | 515 | |||||
Interest Income, net | 642 | 634 | 1,942 | 1,833 | 2,486 | |||||
Expenses from credit losses | 33 | 49 | 92 | 130 | 166 | |||||
Net Interest Income after expenses from credit losses | 609 | 585 | 1,850 | 1,703 | 2,320 | |||||
Non- Interest Income | ||||||||||
Non-Interest Financing income | 63 | 108 | 175 | 195 | 231 | |||||
Fees | 325 | 322 | 960 | 985 | 1,325 | |||||
Other income | 3 | 2 | 5 | 77 | 81 | |||||
Total non- Interest income | 391 | 432 | 1,140 | 1,257 | 1,637 | |||||
Operating and other expenses | ||||||||||
Salaries and related expenses | 394 | 406 | 1,215 | 1,241 | 1,696 | |||||
Maintenance and depreciation of premises and equipment | 90 | 95 | 270 | 285 | 376 | |||||
Amortizations and impairment of intangible assets | 22 | 22 | 68 | 67 | 91 | |||||
Other expenses | 143 | 178 | 447 | 500 | 656 | |||||
Total operating and other expenses | 649 | 701 | 2,000 | 2,093 | 2,819 | |||||
Profit before taxes | 351 | 316 | 990 | 867 | 1,138 | |||||
Provision for taxes on profit | 119 | 103 | 357 | 302 | 408 | |||||
Profit after taxes | 232 | 213 | 633 | 565 | 730 | |||||
The bank's share in profit of equity-basis investee, after taxes | 15 | 9 | 39 | 28 | 37 | |||||
Net profit: | ||||||||||
Before attribution to non‑controlling interests | 247 | 222 | 672 | 593 | 767 | |||||
Attributed to non‑controlling interests | (11) | (10) | (29) | (25) | (34) | |||||
Attributed to shareholders of the Bank | 236 | 212 | 643 | 568 | 733 | |||||
NIS | ||||||||||
Primary profit per share attributed to the shareholders | ||||||||||
Net profit per share of NIS 0.05 par value | 2.35 | 2.11 | 6.41 | 5.66 | 7.31 | |||||
STATEMENT OF COMPREHENSIVE INCOME | ||||||||||
(NIS million) | ||||||||||
For the three months | For the nine months | For the year Ended | ||||||||
2019 | 2018 | 2019 | 2018 | 2018 | ||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||
Net profit before attribution to non‑controlling interests | 247 | 222 | 672 | 593 | 767 | |||||
Net profit attributed to non‑controlling interests | (11) | (10) | (29) | (25) | (34) | |||||
Net profit attributed to the shareholders of the Bank | 236 | 212 | 643 | 568 | 733 | |||||
Other comprehensive income (loss) before taxes: | ||||||||||
Adjustments of available for sale bonds (2018 - securities) to fair value, net | 8 | 22 | 84 | (48) | (102) | |||||
Adjustments of liabilities in respect of employee benefits(1) | (57) | 13 | (45) | 91 | 37 | |||||
Other comprehensive income (loss) before taxes | (49) | 35 | 39 | 43 | (65) | |||||
Related tax effect | 17 | (12) | (14) | (15) | 22 | |||||
Other comprehensive income (loss) before attribution to non‑controlling interests, after taxes | (32) | 23 | 25 | 28 | (43) | |||||
Less other comprehensive loss attributed to non‑controlling interests | (1) | - | - | (1) | (4) | |||||
Other comprehensive income (loss) attributed to the shareholders of the | (31) | 23 | 25 | 29 | (39) | |||||
Comprehensive income before attribution to non‑controlling interests | 215 | 245 | 697 | 621 | 724 | |||||
Comprehensive income attributed to non‑controlling interests | (10) | (10) | (29) | (24) | (30) | |||||
Comprehensive income attributed to the shareholders of the Bank | 205 | 235 | 668 | 597 | 694 | |||||
(1) Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits | ||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||
(NIS million) | ||||||||
September 30, | December 31, | |||||||
2019 | 2018 | 2018 | ||||||
(unaudited) | (unaudited) | (audited) | ||||||
Assets | ||||||||
Cash and deposits with banks | 34,516 | 32,835 | 31,303 | |||||
Securities | 10,453 | 11,880 | 12,595 | |||||
Securities which were borrowed | 126 | 904 | 863 | |||||
Credit to the public | 88,218 | 86,367 | 85,160 | |||||
Provision for Credit losses | (908) | (883) | (868) | |||||
Credit to the public, net | 87,310 | 85,484 | 84,292 | |||||
Credit to the government | 680 | 672 | 700 | |||||
Investments in investee company | 607 | 596 | 606 | |||||
Premises and equipment | 988 | 1,025 | 1,023 | |||||
Intangible assets | 227 | 223 | 239 | |||||
Assets in respect of derivative instruments | 1,078 | 1,009 | 1,399 | |||||
Other assets(2) | 1,003 | 1,223 | 1,100 | |||||
Total assets | 136,988 | 135,851 | 134,120 | |||||
Liabilities Shareholders' Equity | ||||||||
Deposits from the public | 116,292 | 113,804 | 111,697 | |||||
Deposits from banks | 464 | 857 | 1,150 | |||||
Deposits from the Government | 368 | 948 | 982 | |||||
Bonds and subordinated capital notes | 3,690 | 5,155 | 4,989 | |||||
Liabilities in respect of derivative instruments | 1,298 | 942 | 1,294 | |||||
Other liabilities(1)(3) | 6,066 | 5,735 | 5,595 | |||||
Total liabilities | 128,178 | 127,441 | 125,707 | |||||
Capital attributed to the shareholders of the Bank | 8,461 | 8,096 | 8,093 | |||||
Non-controlling interests | 349 | 314 | 320 | |||||
Total equity | 8,810 | 8,410 | 8,413 | |||||
Total liabilities and shareholders' equity | 136,988 | 135,851 | 134,120 | |||||
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 60 million | ||||||||
(2) Of which: other assets measured at fair value in the amount of NIS 49 million and NIS 392 million and NIS 426 million at | ||||||||
(3) Of which: other liabilities measured at fair value in the amount of NIS 170 million and NIS 720 million and NIS 586 | ||||||||
STATEMENT OF CHANGES IN EQUITY | ||||||||||||
(NIS million) | ||||||||||||
For the three months ended September 30, 2019 (unaudited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total equity | |||||||
Balance as of June 30, 2019 | 927 | (95) | 7,534 | 8,366 | 339 | 8,705 | ||||||
Net profit for the period | - | - | 236 | 236 | 11 | 247 | ||||||
Dividend | - | - | (110) | (110) | - | (110) | ||||||
Other comprehensive loss, after tax effect | - | (31) | - | (31) | (1) | (32) | ||||||
Balance as at September 30, 2019 | 927 | (126) | 7,660 | 8,461 | 349 | 8,810 | ||||||
For the three months ended September 30, 2018 (unaudited) | ||||||||||||
Share | Accumulated | Retained earnings (2) | Total | Non- | Total equity | |||||||
Balance as of June 30, 2018 | 927 | (114) | 7,148 | 7,961 | 304 | 8,265 | ||||||
Net profit for the period | - | - | 212 | 212 | 10 | 222 | ||||||
Dividend | - | - | (100) | (100) | - | (100) | ||||||
Other comprehensive income, after tax effect | - | 23 | - | 23 | - | 23 | ||||||
Balance as at September 30, 2018 | 927 | (91) | 7,260 | 8,096 | 314 | 8,410 | ||||||
For the nine months ended September 30, 2019 (unaudited) | ||||||||||||
Share | Accumulated | Retained earnings (2) | Total | Non- | Total equity | |||||||
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 principals(3) | - | 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 | - | - | 643 | 643 | 29 | 672 | ||||||
Dividend | - | - | (300) | (300) | - | (300) | ||||||
Other comprehensive income, after tax effect | - | 25 | - | 25 | - | 25 | ||||||
Balance as at September 30, 2019 | 927 | (126) | 7,660 | 8,461 | 349 | 8,810 | ||||||
For the nine months ended September 30, 2018 (unaudited) | ||||||||||||
Share | Accumulated | Retained | Total | Non- | Total equity | |||||||
Balance as at December 31, 2017 (audited) | 927 | (120) | 6,949 | 7,756 | 290 | 8,046 | ||||||
Net profit for the period | - | - | 568 | 568 | 25 | 593 | ||||||
Dividend | - | - | (255) | (255) | - | (255) | ||||||
Other comprehensive income (loss), after tax effect | - | 29 | - | 29 | (1) | 28 | ||||||
Temporary equity – non-controlling interest | - | - | (2) | (2) | - | (2) | ||||||
Balance as at September 30, 2018 | 927 | (91) | 7,260 | 8,096 | 314 | 8,410 | ||||||
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 | ||||||||||||
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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