First International Bank of Israel Reports Second Quarter 2022 Results
TEL AVIV, Israel, Aug. 16, 2022 /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 2022, ended June 30, 2022.
Second Quarter Financial Highlights:
- Net income of NIS 342 million
- Return on Equity – 13.8%
- BoD approved dividend distribution of 50% of net income
- YoY growth of 24% in financing income from ongoing operations
- Cost/Income ratio continues to improve reaching 54.8%
Management Comment
Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group, stated: "The profitability of the First International Bank in the second quarter of 2022 reflects growth that comes from increase in the ongoing operations of the Bank, in a variety of areas, with an emphasis on customer wealth management and credit growth, while maintaining the stability of the Bank and an adequate risk profile. This, together with the continuation of efficiency measures, which allows consistent and gradual improvement in the efficiency ratio. The first International Bank provides optimal service to customers by means of both, its wide branch network, which is twice as large as the Bank's proportionate share in the banking system, and by means of the Bank's advanced and innovative digital capabilities".
Growth
The growth trend is evident in all core areas of activities of the Bank:
Interest income grew in the second quarter of the year by 21% year over year, financing income from ongoing operations grew in the second quarter of the year by 24%, year over year. Commission income increased by 6% year over year, due to growth of the Bank activities.
Credit to the public grew by 18.3% in the past twelve months (as compared with the corresponding period last year) and by 11.4% since the beginning of the current year, amounting to NIS 113,932 million. Growth in credit is seen in all fields of operation: the large business segment grew in the past twelve months by 39%, the middle market business segment grew by 33.4%, the small business segment by 13.8%, credit to households grew by 6.6%, and housing related loans grew by 15%. Credit to the public grew in the second quarter of the year by 6.1%.
Deposits by the public grew by 6.8% in the second quarter of the year compared with the first quarter, amounting to NIS 164,539 million. Since the beginning of the year, deposits by the public grew by 7.2%.
Profitability
Net earning of the First International Bank Group in the second quarter of 2022 amounted to NIS 342 million, as compared to earnings of NIS 322 million in the first quarter of the year, and earnings of NIS 404 million in the corresponding quarter last year, in which the Bank recorded exceptional credit loss income, on background of the exit from the Corona crisis. Return on equity reached 13.8%. In the first half of the year, net earnings amounted to NIS 664 million, as compared to NIS 708 million in the corresponding first half of last year, with return on equity reaching 13.3%.
Credit loss expenses amounted in the second quarter of the year to NIS 31 million, as compared to income of NIS 128 million in the corresponding quarter last year, representing growth of NIS 159 million. This growth stems ,mostly, from exceptional income that was recorded last year in respect of credit losses in the amount of NIS 114 million, representing the decline in the collective credit loss allowance, explained by improvement in the economic indicators upon exit from the Corona crisis. An increase in the collective allowance was recorded in the second quarter of the year following the growth in volume of performing credit.
The volume of problematic credit declined by approximately 21%, as compared to the corresponding period last year, and by 15% as compared to the end of 2021.
Efficiency
Cost/income ratio continues to improve reaching 54.8% in the second quarter of the year, as compared with 57.5% in the corresponding period last year. The Bank continues to implement efficiency measures, which include, inter alia, improvement and automation of work procedures, innovation in digital and the advanced use of data. All these allow consistent and gradual improvement in the cost/income ratio.
Operating and other expenses amounted in the second quarter of the year to NIS 662 million, a reduction of 3.2% as compared to the first quarter of 2022, and a rise of 1.5% as compared to the second quarter of last year. Maintenance and depreciation of building and equipment expenses decreased by 4.7% in the second quarter of the year in relation to the corresponding period last year, following efficiency measures employed with respect to the real estate assets of the Group.
Financial stability
Equity attributed to the shareholders of the Bank reached an amount of NIS 9,973 million. The Tier I equity capital ratio reached 10.15%, which is higher by 0.9% than the required regulatory ratio.
In accordance with the profit distribution policy adopted by the Board of Directors of the Bank, the Bank distributes a dividend at the rate of up to 50% of the annual net earnings. The Board of Directors of the Bank, approved today a dividend distribution of NIS 170 million, representing 50% of net earnings for the second quarter of 2022, this in addition to dividends of NIS 540 million distributed so far in the current year. The annual dividend yield as of July 31, 2022, amounted to 8.6%, the highest dividend yield in the banking system.
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES |
||||||
Principal financial ratios |
For the six months |
For the year |
||||
2022 |
2021 |
2021 |
||||
percent |
||||||
Execution indices |
||||||
Return on equity attributed to shareholders of the Bank(1)(3) |
13.30 % |
*15.1% |
14.70 % |
|||
Return on average assets(1) |
0.73 % |
*0.83% |
0.82 % |
|||
Ratio of equity capital tier 1 |
10.15 % |
*11.70% |
11.46 % |
|||
Leverage ratio |
5.02 % |
*5.51% |
5.34 % |
|||
Liquidity coverage ratio |
125 % |
137 % |
128 % |
|||
Net stable funding ratio (2) |
134 % |
**139% |
||||
Ratio of total income to average assets(1) |
2.60 % |
2.60 % |
2.60 % |
|||
Ratio of interest income, net to average assets (1) |
1.80 % |
1.60 % |
1.60 % |
|||
Ratio of fees to average assets (1) |
0.80 % |
0.80 % |
0.80 % |
|||
Efficiency ratio |
56.60 % |
*58.2% |
58.30 % |
|||
Credit quality indices |
||||||
Ratio of provision for credit losses to credit to the public |
0.98 % |
1.19 % |
1.05 % |
|||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public |
0.55 % |
***0.71% |
***0.62% |
|||
Ratio of provision for credit losses to total impaired credit to the public |
185 % |
***239% |
***244% |
|||
Ratio of net write-offs to average total credit to the public (1) |
0.04 % |
- |
(0.01 %) |
|||
Ratio of expenses (income) for credit losses to average total credit to the public (1) |
0.06 % |
(0.30 %) |
(0.23 %) |
|||
Principal data from the statement of income |
For the six months |
|||||
ended June 30, |
||||||
2022 |
2021 |
|||||
NIS million |
||||||
Net profit attributed to shareholders of the Bank |
664 |
*708 |
||||
Interest Income, net |
1,603 |
1,380 |
||||
Expenses (income) from credit losses |
31 |
(137) |
||||
Total non-Interest income |
775 |
*866 |
||||
Of which: Fees |
755 |
711 |
||||
Total operating and other expenses |
1,346 |
1,308 |
||||
Of which: Salaries and related expenses |
815 |
800 |
||||
Primary net profit per share of NIS 0.05 par value (NIS) |
6.62 |
*7.06 |
||||
Principal data from the balance sheet |
30.6.22 |
30.6.21 |
31.12.21 |
|||
NIS million |
||||||
Total assets |
192,026 |
*173,075 |
180,470 |
|||
of which: Cash and deposits with banks |
56,305 |
56,673 |
57,370 |
|||
Securities |
15,349 |
*16,291 |
15,091 |
|||
Credit to the public, net |
112,811 |
95,191 |
101,164 |
|||
Total liabilities |
181,606 |
*162,774 |
170,033 |
|||
of which: Deposits from the public |
164,539 |
146,276 |
153,447 |
|||
Deposits from banks |
5,429 |
5,035 |
5,144 |
|||
Bonds and subordinated capital notes |
4,187 |
2,833 |
3,356 |
|||
Capital attributed to the shareholders of the Bank |
9,973 |
*9,880 |
10,003 |
|||
Additional data |
30.6.22 |
30.6.21 |
31.12.21 |
|||
Share price (0.01 NIS) |
13,010 |
10,440 |
12,950 |
|||
Dividend per share (0.01 NIS) |
538 |
- |
543 |
|||
* Immaterial adjustment of comparative data.
** Restated.
*** Restated in respect of the new disclosure format on nonaccrual debts instead of impaired debts.
(1) Annualized.
(2) According to instructions of the Bank of Israel the Net stable funding ratio was calculated since 2021. Therefor no comparative data for the six months ended June 30, 2021 is stated.
(3) According to instructions of the Bank of Israel, beginning in 2022, the method for the conversion of return per period into annualized terms was changed, from exponential calculation to linear calculation. Comparative data have been restated.
CONSOLIDATED STATEMENT OF INCOME |
||||||||||
(NIS million) |
||||||||||
For the three months |
For the six months |
For the year Ended |
||||||||
2022 |
2021 |
2022 |
2021 |
2021 |
||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||
Interest Income |
1,104 |
856 |
1,975 |
1,585 |
3,150 |
|||||
Interest Expenses |
245 |
146 |
372 |
205 |
356 |
|||||
Interest Income, net |
859 |
710 |
1,603 |
1,380 |
2,794 |
|||||
Expenses (income) from credit losses |
31 |
(128) |
31 |
(137) |
(216) |
|||||
Net Interest Income after expenses from credit losses |
828 |
838 |
1,572 |
1,517 |
3,010 |
|||||
Non- Interest Income |
||||||||||
Non-Interest Financing income (expenses) |
(22) |
*75 |
12 |
*151 |
303 |
|||||
Fees |
371 |
350 |
755 |
711 |
1,444 |
|||||
Other income |
- |
- |
8 |
4 |
9 |
|||||
Total non- Interest income |
349 |
425 |
775 |
866 |
1,756 |
|||||
Operating and other expenses |
||||||||||
Salaries and related expenses |
401 |
402 |
815 |
800 |
1,601 |
|||||
Maintenance and depreciation of premises and equipment |
82 |
86 |
163 |
171 |
340 |
|||||
Amortizations and impairment of intangible assets |
28 |
25 |
55 |
51 |
105 |
|||||
Other expenses |
151 |
139 |
313 |
286 |
606 |
|||||
Total operating and other expenses |
662 |
652 |
1,346 |
1,308 |
2,652 |
|||||
Profit before taxes |
515 |
611 |
1,001 |
1,075 |
2,114 |
|||||
Provision for taxes on profit |
179 |
*216 |
348 |
*377 |
728 |
|||||
Profit after taxes |
336 |
395 |
653 |
698 |
1,386 |
|||||
The bank's share in profit of equity-basis investee, after taxes |
20 |
23 |
37 |
36 |
69 |
|||||
Net profit: |
||||||||||
Before attribution to non‑controlling interests |
356 |
418 |
690 |
734 |
1,455 |
|||||
Attributed to non‑controlling interests |
(14) |
(14) |
(26) |
(26) |
(50) |
|||||
Attributed to shareholders of the Bank |
342 |
404 |
664 |
708 |
1,405 |
|||||
NIS |
||||||||||
Primary profit per share attributed to the shareholders |
||||||||||
Net profit per share of NIS 0.05 par value |
3.41 |
4.03 |
6.62 |
7.06 |
14.00 |
|||||
* Immaterial adjustment of comparative data.
STATEMENT OF COMPREHENSIVE INCOME |
||||||||||
(NIS million) |
||||||||||
For the three months |
For the six months |
For the year |
||||||||
2022 |
2021 |
2022 |
2021 |
2021 |
||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||
Net profit before attribution to non‑controlling interests |
356 |
*418 |
690 |
*734 |
1,455 |
|||||
Net profit attributed to non‑controlling interests |
(14) |
(14) |
(26) |
(26) |
(50) |
|||||
Net profit attributed to the shareholders of the Bank |
342 |
404 |
664 |
708 |
1,405 |
|||||
Other comprehensive income (loss) before taxes: |
||||||||||
Adjustments of available for sale bonds to fair value, net |
(161) |
(7) |
(377) |
4 |
27 |
|||||
Adjustments of liabilities in respect of employee benefits(1) |
65 |
(20) |
196 |
46 |
(24) |
|||||
Other comprehensive income (loss) before taxes |
(96) |
(27) |
(181) |
50 |
3 |
|||||
Related tax effect |
32 |
8 |
62 |
(18) |
(1) |
|||||
Other comprehensive income (loss) before attribution to non‑controlling interests, after taxes |
(64) |
(19) |
(119) |
32 |
2 |
|||||
Less other comprehensive income (loss) attributed to non‑controlling interests |
(4) |
- |
(9) |
1 |
- |
|||||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes |
(60) |
(19) |
(110) |
31 |
2 |
|||||
Comprehensive income before attribution to non‑controlling interests |
292 |
399 |
571 |
766 |
1,457 |
|||||
Comprehensive income attributed to non‑controlling interests |
(10) |
(14) |
(17) |
(27) |
(50) |
|||||
Comprehensive income attributed to the shareholders of the Bank |
282 |
385 |
554 |
739 |
1,407 |
|||||
* Immaterial adjustment of comparative data.
(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.
CONSOLIDATED BALANCE SHEET |
||||||
(NIS million) |
||||||
June 30, |
December 31, |
|||||
2022 |
2021 |
2021 |
||||
(unaudited) |
(unaudited) |
(audited) |
||||
Assets |
||||||
Cash and deposits with banks |
56,305 |
56,673 |
57,370 |
|||
Securities |
15,349 |
*16,291 |
15,091 |
|||
Securities which were borrowed |
289 |
32 |
845 |
|||
Credit to the public |
113,932 |
96,340 |
102,240 |
|||
Provision for Credit losses |
(1,121) |
(1,149) |
(1,076) |
|||
Credit to the public, net |
112,811 |
95,191 |
101,164 |
|||
Credit to the government |
939 |
101 |
811 |
|||
Investments in investee company |
669 |
675 |
713 |
|||
Premises and equipment |
904 |
945 |
931 |
|||
Intangible assets |
300 |
279 |
300 |
|||
Assets in respect of derivative instruments |
2,880 |
1,307 |
1,709 |
|||
Other assets(2) |
1,580 |
1,581 |
1,536 |
|||
Total assets |
192,026 |
173,075 |
180,470 |
|||
Liabilities and Shareholders' Equity |
||||||
Deposits from the public |
164,539 |
146,276 |
153,447 |
|||
Deposits from banks |
5,429 |
5,035 |
5,144 |
|||
Deposits from the Government |
570 |
435 |
960 |
|||
Bonds and subordinated capital notes |
4,187 |
2,833 |
3,356 |
|||
Liabilities in respect of derivative instruments |
2,412 |
1,440 |
2,038 |
|||
Other liabilities(1)(3) |
4,469 |
*6,755 |
5,088 |
|||
Total liabilities |
181,606 |
162,774 |
170,033 |
|||
Capital attributed to the shareholders of the Bank |
9,973 |
*9,880 |
10,003 |
|||
Non-controlling interests |
447 |
421 |
434 |
|||
Total equity |
10,420 |
10,301 |
10,437 |
|||
Total liabilities and shareholders' equity |
192,026 |
173,075 |
180,470 |
|||
* Immaterial adjustment of comparative data.
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 109 million and NIS 79 million and NIS 79 million at 30.6.22, 30.6.21 and 31.12.21, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 283 million and NIS 353 million and NIS 333 million at 30.6.22, 30.6.21 and 31.12.21, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 337 million and NIS 382 million and NIS 641 million at 30.6.22, 30.6.21 and 31.12.21, respectively.
STATEMENT OF CHANGES IN EQUITY |
||||||||||||
(NIS million) |
||||||||||||
For the three months ended June 30, 2022 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as of March 31, 2022 |
927 |
(231) |
9,155 |
9,851 |
437 |
10,288 |
||||||
Net profit for the period |
- |
- |
342 |
342 |
14 |
356 |
||||||
Dividend |
- |
- |
(160) |
(160) |
- |
(160) |
||||||
Other comprehensive loss, after tax effect |
- |
(60) |
- |
(60) |
(4) |
(64) |
||||||
Balance as at June 30, 2022 |
927 |
(291) |
9,337 |
9,973 |
447 |
10,420 |
||||||
For the three months ended June 30, 2021 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as of March 31, 2021 |
927 |
(133) |
**8,701 |
9,495 |
407 |
9,902 |
||||||
Net profit for the period |
- |
- |
**404 |
404 |
14 |
418 |
||||||
Other comprehensive loss, after tax effect |
- |
(19) |
- |
(19) |
- |
(19) |
||||||
Balance as at June 30, 2021 |
927 |
(152) |
9,105 |
9,880 |
421 |
10,301 |
||||||
For the six months ended June 30, 2022 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as at December 31, 2021 (audited) |
927 |
(181) |
9,257 |
10,003 |
434 |
10,437 |
||||||
Adjustment of the opening balance, net of tax, |
- |
- |
(44) |
(44) |
(4) |
(48) |
||||||
Adjusted balance at January 1, 2022, following |
927 |
(181) |
9,213 |
9,959 |
430 |
10,389 |
||||||
Net profit for the period |
- |
- |
664 |
664 |
26 |
690 |
||||||
Dividend |
- |
- |
(540) |
(540) |
- |
(540) |
||||||
Other comprehensive loss, after tax effect |
- |
(110) |
- |
(110) |
(9) |
(119) |
||||||
Balance as at June 30, 2022 |
927 |
(291) |
9,337 |
9,973 |
447 |
10,420 |
||||||
For the six months ended June 30, 2021 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as at December 31, 2020 (audited) |
927 |
(183) |
8,397 |
9,141 |
394 |
9,535 |
||||||
Net profit for the period |
- |
- |
**708 |
708 |
26 |
734 |
||||||
Other comprehensive income, after tax effect |
- |
31 |
- |
31 |
1 |
32 |
||||||
Balance as at June 30, 2021 |
927 |
(152) |
9,105 |
9,880 |
421 |
10,301 |
||||||
STATEMENT OF CHANGES IN EQUITY (CONT'D) |
||||||||||||
(NIS million) |
||||||||||||
For the year ended December 31, 2021 (audited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as at December 31, 2020 |
927 |
(183) |
8,397 |
9,141 |
394 |
9,535 |
||||||
Net profit for the year |
- |
- |
1,405 |
1,405 |
50 |
1,455 |
||||||
Dividend |
- |
- |
(545) |
(545) |
(10) |
(555) |
||||||
Other comprehensive loss, after tax effect |
- |
2 |
- |
2 |
- |
2 |
||||||
Balance as at December 31, 2021 |
927 |
(181) |
9,257 |
10,003 |
434 |
10,437 |
||||||
* Cumulative effect of the initial implementation of US accounting principles in the matter of financial instruments – credit losses (ASC-326).
** Immaterial adjustment of comparative data.
(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.
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: +1-646-201-924
SOURCE First International Bank of Israel
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