The First International Bank Reports its Financial Results for the First Quarter of 2024
Results reflect high profitability while maintaining financial stability
TEL AVIV, Israel, May 28, 2024 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the first quarter ended March 31, 2024.
Financial Highlights
- Net income of NIS 569 million in the first quarter of 2024
- The Return on equity was 18.7%
- Deposits by the public increased by 2.9% compared to the end of 2023 and by 13.4% compared to the comparative period in the previous year
- The portfolio of customers' assets increased by 7.2% compared to the end of 2023 and by 23.4% compared to the first quarter of 2023, reaching approximately NIS 720 billion
- Equity attributed to shareholders of the Bank increased by 13.5% compared to the end of the first quarter of 2023
- The tier 1 shareholders' equity was 11.78% and the liquidity cover ratio was 161%
- The Bank's Board of Directors decided to distribute a dividend, amounting to 40% of the net income for the quarter
Financial Results of the First Quarter 2024
Net income for the First International Bank was NIS 569 million in the first quarter of 2024, an increase of 14% compared to the fourth quarter of 2023, and a decrease of 9.8 % compared to the first quarter of 2023. Return on equity was 18.7%. The income for the first quarter included a tax benefit of NIS 49 million in respect of prior years. Excluding the tax benefit, the return on equity amounted to 17.1%.
Total revenue amounted to NIS 1,581 million in the first quarter of 2024, a decrease of 7% compared to the first quarter of last year. Financing income from operating activities amounted to NIS 1,164 million in the first quarter of 2024, compared to NIS 1,332 million in the first quarter of last year. The decrease was due, among other impacts, to the transition to depositing in interest-bearing accounts rather than non-interest bearing credit balances in current accounts, as well as changes in the consumer price index.
Given the quality of the credit portfolio, as well as the building-up of provisions in recent quarters, total income from credit losses amounted to NIS 2 million in the first quarter of 2024, compared to expenses of NIS 72 million in the first quarter of 2023. The specific net income from credit losses amounted to NIS 6 million in the first three months of the year, compared to NIS 14 million in the first quarter of 2023. The collective expense for credit losses amounted to NIS 4 million in the first three months of the year, compared to NIS 86 million in the first quarter of the previous year. The decrease in the collective expense for credit losses compared to the comparative period last year was due to an improvement in existing and forecast macroeconomic indices during the first quarter of the current year.
The ratio of high quality credit to non-performing loans (NPL) remained stable during the first quarter of 2024 and stood at 0.6%. The ratio indicates the quality of the credit portfolio (the balance of non-accrual loans or loans in arrears of 90 days or more) as a percentage of total credit to the public. The overall coverage ratio (the percentage of the total allowance for credit losses to the total amount of the credit to the public) stood at 1.53%.
Operating and other expenses amounted to NIS 731 million in the first quarter of 2024, an increase of 1% compared to the first quarter of 2023. Salaries and related expenses decreased by 1.6% and amounted to NIS 442 million, with the decrease primarily due to a reduction in the provision for bonuses, which was, among other reasons, as a result of the signing of labor agreements for the year 2023 - 2026, in the first quarter of last year. The decrease was partially offset by an increase in current salaries.
The efficiency ratio was 46.2% in the first quarter of 2024, compared to 43.5 % in the first quarter of 2023.
The provision for taxes on income amounted to NIS 279 million in the first three months of the year, compared to NIS 315 million in the first three months of the previous year. The effective tax rate amounted to 32.7%, compared to 34.8% in the comparative period of last year, and was impacted by the tax benefit of NIS 49 million in respect of prior years, and an increase in the statutory tax rate.
Credit to the public amounted to NIS 116,816 million, a decrease of 2% compared to the end of 2023, and of 2.5% compared the end of the first quarter of last year. The decrease compared to the end of 2023 was primarily due to a decrease in credit to large businesses, among others, in the capital markets sector. In other sectors, there were increases in credit recorded: credit to households: (1.4%), housing loans, small businesses and medium-sized businesses.
Deposits by the public amounted to NIS 196,615 million, an increase of 2.9% compared to the end of 2023 and an increase of 13.4% compared to the end of the first quarter of last year. The total customer asset portfolio amounted to NIS 720 billion and grew by 7.2% compared to the end of 2023 and grew by 23.4% compared to the end of the first quarter of 2023.
The equity attributed to the Bank's shareholders increased to NIS 12,355 million, an increase of 2.4% compared to the end of 2023 and of 13.5% compared to the end of the first quarter of the previous year. The tier 1 shareholders' equity ratio increased to 11.78%, above the required regulatory ratio level. The liquidity coverage ratio rose to 161%, compared to 156% at the end of 2023.
Taking into consideration the Supervisor of Banks' directives regarding Capital Planning and Profits Distribution Policies, the Bank's Board of Directors decided to approve the distribution of a cash dividend at a rate of 40% of equity. The Bank's Board of Directors will continue to implement the Bank's dividend distribution policy, monitoring ongoing developments and their impact on the Israeli economy and on the bank.
Eli Cohen, CEO of First International Bank commented, "The State of Israel is going through a complex and ongoing crisis, which combines security-related, social, economic and diplomatic aspects. As a stable bank, First International Bank will continue to support and stand by its customers, assist them and innovate, providing relevant and innovative value-propositions."
"First International Bank entered the crisis well-prepared, which has been apparent, among other aspects, due to its high capital and liquidity cushions that are among the highest in the Israeli banking system as well as a high-quality and diversified credit portfolio. All these are the result of the Bank's cautious and responsible policy, and focused risk management, as reflected in the Bank's results and achievements, as demonstrated in the results for the first quarter of 2024."
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES | ||||||
Principal financial ratios | For the three months | For the year | ||||
2024 | 2023 | 2023 | ||||
Percent | ||||||
Principal execution indices | ||||||
Return on equity attributed to shareholders of the Bank(1) | 18.7 | 23.6 | 19.7 | |||
Return on average assets(1) | 1.03 | 1.28 | 1.06 | |||
Ratio of equity capital tier 1 | 11.78 | 10.55 | 11.35 | |||
Leverage ratio | 5.27 | 5.15 | 5.26 | |||
Liquidity coverage ratio | 161 | 131 | 156 | |||
Net stable funding ratio | 150 | 133 | 146 | |||
Ratio of total income to average assets(1) | 2.9 | 3.5 | 3.2 | |||
Ratio of interest income, net to average assets (1) | 2.0 | 2.6 | 2.4 | |||
Ratio of fees to average assets (1) | 0.7 | 0.8 | 0.7 | |||
Efficiency ratio | 46.2 | 42.6 | 43.5 | |||
Credit quality indices | ||||||
Ratio of provision for credit losses to credit to the public | 1.38 | 1.06 | 1.36 | |||
Ratio of total provision for credit losses (2) to credit to the public | 1.53 | 1.17 | 1.50 | |||
Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public | 0.60 | 0.47 | 0.60 | |||
Ratio of provision for credit losses to total non-accruing credit to the public | 236.1 | 232.5 | 234.5 | |||
Ratio of net write-offs to average total credit to the public (1) | (0.02) | (0.04) | 0.03 | |||
Ratio of expenses (income) for credit losses to average total credit to the public (1) | (0.01) | 0.25 | 0.42 | |||
Principal data from the statement of income | For the three months | |||
2024 | 2023 | |||
NIS million | ||||
Net profit attributed to shareholders of the Bank | 569 | 631 | ||
Interest Income, net | 1,115 | 1,275 | ||
Expenses (income) from credit losses | (2) | 72 | ||
Total non-Interest income | 466 | 425 | ||
Of which: Fees | 365 | 388 | ||
Total operating and other expenses | 731 | 724 | ||
Of which: Salaries and related expenses | 442 | 449 | ||
Primary net profit per share of NIS 0.05 par value (NIS) | 5.67 | 6.29 | ||
Principal data from the balance sheet | 31.3.24 | 31.3.23 | 31.12.23 | |||
NIS million | ||||||
Total assets | 225,941 | 204,312 | 221,593 | |||
of which: Cash and deposits with banks | 76,731 | 57,763 | 68,866 | |||
Securities | 26,375 | 19,756 | 26,985 | |||
Credit to the public, net | 115,199 | 118,502 | 117,622 | |||
Total liabilities | 212,989 | 192,923 | 208,947 | |||
of which: Deposits from the public | 196,615 | 173,390 | 191,125 | |||
Deposits from banks | 3,586 | 5,481 | 4,314 | |||
Bonds and subordinated capital notes | 4,736 | 4,770 | 4,767 | |||
Capital attributed to the shareholders of the Bank | 12,355 | 10,888 | 12,071 |
Additional data | 31.3.24 | 31.3.23 | 31.12.23 | |||
Share price (0.01 NIS) | 15,440 | 12,650 | 14,990 | |||
Dividend per share (0.01 NIS) | 268 | 267 | 795 |
(1) Annualized.
(2) Including provision in respect of off-balance sheet credit instruments.
CONSOLIDATED STATEMENT OF INCOME | ||||||
For the three months | For the year Ended | |||||
2024 | 2023 | 2023 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Interest Income | 2,576 | 2,176 | 9,850 | |||
Interest Expenses | 1,461 | 901 | 4,884 | |||
Interest Income, net | 1,115 | 1,275 | 4,966 | |||
Expenses (income) from credit losses | (2) | 72 | 502 | |||
Net Interest Income after expenses from credit losses | 1,117 | 1,203 | 4,464 | |||
Non- Interest Income | ||||||
Non-Interest Financing income | 100 | 36 | 142 | |||
Fees | 365 | 388 | 1,502 | |||
Other income | 1 | 1 | 8 | |||
Total non- Interest income | 466 | 425 | 1,652 | |||
Operating and other expenses | ||||||
Salaries and related expenses | 442 | 449 | 1,746 | |||
Maintenance and depreciation of premises and equipment | 87 | 84 | 341 | |||
Amortizations and impairment of intangible assets | 31 | 30 | 122 | |||
Other expenses | 171 | 161 | 668 | |||
Total operating and other expenses | 731 | 724 | 2,877 | |||
Profit before taxes | 852 | 904 | 3,239 | |||
Provision for taxes on profit | 279 | 315 | 1,090 | |||
Profit after taxes | 573 | 589 | 2,149 | |||
The bank's share in profit of equity-basis investee, after taxes | 18 | 65 | 113 | |||
Net profit: | ||||||
Before attribution to non–controlling interests | 591 | 654 | 2,262 | |||
Attributed to non–controlling interests | (22) | (23) | (90) | |||
Attributed to shareholders of the Bank | 569 | 631 | 2,172 | |||
NIS | ||||||
Primary profit per share attributed to the shareholders of the Bank | ||||||
Net profit per share of NIS 0.05 par value | 5.67 | 6.29 | 21.65 | |||
The notes to the financial statements are an integral part thereof.
STATEMENT OF COMPREHENSIVE INCOME | ||||||
For the three months | For the year Ended | |||||
2024 | 2023 | 2023 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Net profit before attribution to non–controlling interests | 591 | 654 | 2,262 | |||
Net profit attributed to non–controlling interests | (22) | (23) | (90) | |||
Net profit attributed to the shareholders of the Bank | 569 | 631 | 2,172 | |||
Other comprehensive income (loss) before taxes: | ||||||
Adjustments of available for sale bonds to fair value, net | (44) | (30) | 213 | |||
Adjustments of liabilities in respect of employee benefits(1) | 11 | (3) | 25 | |||
Other comprehensive income (loss) before taxes | (33) | (33) | 238 | |||
Related tax effect | 17 | 11 | (81) | |||
Other comprehensive income (loss) before attribution to non–controlling interests, after taxes | (16) | (22) | 157 | |||
Less other comprehensive income attributed to non–controlling interests | - | 2 | 9 | |||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes | (16) | (24) | 148 | |||
Comprehensive income before attribution to non–controlling interests | 575 | 632 | 2,419 | |||
Comprehensive income attributed to non–controlling interests | (22) | (25) | (99) | |||
Comprehensive income attributed to the shareholders of the Bank | 553 | 607 | 2,320 | |||
(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 | ||||||
March 31, | December 31, | |||||
2024 | 2023 | 2023 | ||||
(unaudited) | (unaudited) | (audited) | ||||
Assets | ||||||
Cash and deposits with banks | 76,731 | 57,763 | 68,866 | |||
Securities | 26,375 | 19,756 | 26,985 | |||
Securities which were borrowed | 2 | 45 | 57 | |||
Credit to the public | 116,816 | 119,769 | 119,240 | |||
Provision for Credit losses | (1,617) | (1,267) | (1,618) | |||
Credit to the public, net | 115,199 | 118,502 | 117,622 | |||
Credit to the government | 965 | 935 | 1,055 | |||
Investment in investee company | 800 | 730 | 786 | |||
Premises and equipment | 867 | 899 | 877 | |||
Intangible assets | 325 | 307 | 328 | |||
Assets in respect of derivative instruments | 3,324 | 4,047 | 3,651 | |||
Other assets(2) | 1,353 | 1,328 | 1,366 | |||
Total assets | 225,941 | 204,312 | 221,593 | |||
Liabilities and Shareholders' Equity | ||||||
Deposits from the public | 196,615 | 173,390 | 191,125 | |||
Deposits from banks | 3,586 | 5,481 | 4,314 | |||
Deposits from the Government | 710 | 828 | 750 | |||
Bonds and subordinated capital notes | 4,736 | 4,770 | 4,767 | |||
Liabilities in respect of derivative instruments | 3,085 | 3,572 | 3,784 | |||
Other liabilities(1)(3) | 4,257 | 4,882 | 4,207 | |||
Total liabilities | 212,989 | 192,923 | 208,947 | |||
Capital attributed to the shareholders of the Bank | 12,355 | 10,888 | 12,071 | |||
Non-controlling interests | 597 | 501 | 575 | |||
Total equity | 12,952 | 11,389 | 12,646 | |||
Total liabilities and shareholders' equity | 225,941 | 204,312 | 221,593 | |||
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 170 million and NIS 129 million and NIS 165 million at 31.3.24, 31.3.23 and 31.12.23, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 5 million and NIS 15 million and NIS 10 million at 31.3.24, 31.3.23 and 31.12.23, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 5 million and NIS 21 million and NIS 11 million at 31.3.24, 31.3.23 and 31.12.23, respectively.
STATEMENT OF CHANGES IN EQUITY | ||||||||||||
For the three months ended March 31, 2024 (unaudited) | ||||||||||||
Share capital | Accumulated other | Retained | Total share-holders' | Non- controlling | Total | |||||||
Balance as at December 31, 2023 (audited) | 927 | (155) | 11,299 | 12,071 | 575 | 12,646 | ||||||
Net profit for the period | - | - | 569 | 569 | 22 | 591 | ||||||
Dividend | - | - | (269) | (269) | - | (269) | ||||||
Other comprehensive loss, after tax effect | - | (16) | - | (16) | - | (16) | ||||||
Balance as at March 31, 2024 | 927 | (171) | 11,599 | 12,355 | 597 | 12,952 | ||||||
For the three months ended March 31, 2023 (unaudited) | ||||||||||||
Share capital | Accumulated other | Retained | Total share-holders' | Non- controlling | Total | |||||||
Balance as at December 31, 2022 (audited) | 927 | (303) | 9,935 | 10,559 | 476 | 11,035 | ||||||
Adjustment of the opening balance, net of tax, | - | - | (10) | (10) | - | (10) | ||||||
Adjusted balance at January 1, 2023, f | 927 | (303) | 9,925 | 10,549 | 476 | 11,025 | ||||||
Net profit for the period | - | - | 631 | 631 | 23 | 654 | ||||||
Dividend | - | - | (268) | (268) | - | (268) | ||||||
Other comprehensive income (loss), after tax effect | - | (24) | - | (24) | 2 | (22) | ||||||
Balance as at March 31, 2023 | 927 | (327) | 10,288 | 10,888 | 501 | 11,389 | ||||||
For year ended December 31, 2023 (audited) | ||||||||||||
Share capital | Accumulated other | Retained | Total share-holders' | Non- controlling | Total | |||||||
Balance as at December 31, 2022 | 927 | (303) | 9,935 | 10,559 | 476 | 11,035 | ||||||
Adjustment of the opening balance, net of tax, | - | - | (10) | (10) | - | (10) | ||||||
Adjusted balance at January 1, 2023, | 927 | (303) | 9,925 | 10,549 | 476 | 11,025 | ||||||
Net profit for the year | - | - | 2,172 | 2,172 | 90 | 2,262 | ||||||
Dividend | - | - | (798) | (798) | - | (798) | ||||||
Other comprehensive income, after tax effect | - | 148 | - | 148 | 9 | 157 | ||||||
Balance as at December 31, 2023 | 927 | (155) | 11,299 | 12,071 | 575 | 12,646 | ||||||
* Cumulative effect of the initial implementation of US accounting principles in the matter of financial instruments - credit losses (ASC-326).
(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
[email protected]
+972-3-519-6224
SOURCE First International Bank of Israel
Share this article