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 ended September 30				For the nine months ended September 30				For the year Ended December 31
		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       of the Bank
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 ended September 30				For the nine months ended September 30				For the year Ended December 31
		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 Bank, after taxes		(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 pension plans, of amounts recorded in the past in other comprehensive profit.

 

 

 

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 and NIS 68 million and NIS 64 million at 30.9.19, 30.9.18 and 31.12.18, respectively.
(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 30.9.19, 30.9.18 and 31.12.18, respectively.
(3)   Of which: other liabilities measured at fair value in the amount of NIS 170 million and NIS 720 million and NIS 586 million at 30.9.19, 30.9.18 and 31.12.18, respectively.

 

 

STATEMENT OF CHANGES IN EQUITY
(NIS million)
		For the three months ended September 30, 2019 (unaudited)
		Share capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)		Total share- holders' equity		Non- controlling interests		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 capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)		Total share- holders' equity		Non- controlling interests		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 capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)		Total share-holders' equity		Non- controlling interests		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 capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)		Total share- holders' equity		Non- controlling interests		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 capital and premium (1)		Accumulated other comprehensive loss		Retained earnings (2)		Total		Non- controlling interests		Total equity
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 respect of financial instruments (ASU 2016-01).

 

Contact: 
Dafna Zucker 
First International Bank of Israel 
e-mail: [e-mail] 
Tel: [phone] 

Ehud Helft 
GK Investor & Public Relations 
e-mail: [e-mail] 
Tel: [phone]

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SOURCE First International Bank of Israel