TEL AVIV, Israel, Aug. 15, 2023 /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 2023, ended June 30, 2023.

Financial Highlights of the Second Quarter of 2023

  • Net profit of the First International Bank for the second quarter 2023 was NIS 587 million;
  • Return on equity - 21.3%;
  • Credit to the public grew by 5.4% year-over-year and by 2.5% in the first half of 2023
  • Deposits by the public grew by 8.8% year-over-year and by 6.4% in the first half of 2023;
  • Credit loss expenses increased in the first half of the year to NIS 171 million,  as of a result of a NIS 198 million increase in the collective allowance;
  • Efficiency ratio in the first half of 2023 - 42.6%;
  • Ratio of Tier 1 equity capital to risk components - 10.64%;

The First International Bank published its financial statements for the second quarter of 2023, reflecting continuing growth in all core operations of the Bank, while continuing to maintain financial stability.

Credit to the public grew by 5.4% year-over-year (in relation that of June 30, 2022) amounting to NIS 120,028 million. In the first half of 2023 (in relation that of June 30, 2022) credit to the public grew by 2.5%. Growth in credit was achieved while maintaining commensurate risk.

Deposits by the public grew by 8.8% year-over-year, to NIS 179,013 million. In the first half of the year deposits by the public grew by 6.4%. The customer assets portfolio grew by 8.8%, to NIS 612 billion.

Net profit in the second quarter of 2023 for the First International Bank Group, was NIS 587 million, as compared to net profit of NIS 342 million in the corresponding period last year, an increase of 71.6%. Return on equity was 21.3%.

In the first half of the year, net profit was NIS 1,218 million, an increase of 83.4% as compared to the corresponding first half of last year. The return on equity for the first half of the year was 22.6%.

Total revenue at the Bank in the first half of the year was NIS 3,435 million, an increase of 44.4% compared with the corresponding period last year. Growth was due to the impact of the appreciation of the shekel and dollar interest rates, by the effect of changes in the consumer price index (CPI) and by growth in the volume of business operations.

Operating and other expenses in the first half of the year were NIS 1,464 million, representing an increase of 8.8%, mostly because of an increase in payroll expenses due to a provision for bonus payments and an increase ongoing payroll. The increase in payroll expenses was due, among others, to the signing of employment agreements for the years 2023-2026.

The Bank's share in earnings of an affiliated company (ICC), net of the taxes, was NIS 84 million for the first half of the year, as compared to NIS 37 million in the corresponding period last year, with the increase mostly due to non-recurring gains in the first quarter off 2023 on the sale of the ICC building.

Equity attributed to the shareholders of the Bank increased to NIS 11,292 million, an increase of 6.9% in relation to that of December 31, 2022.

The Tier 1 equity capital ratio increased to 10.64%, higher by 1.4 percentage points than that of the required regulatory ratio. As of December 31, 2022, the ratio amounted to 10.42%.

The comprehensive capital ratio also increased to 13.92% compared with 13.75% as at December 31, 2022, 1.42 percentage points over the required regulatory ratio.

The liquidity coverage ratio increased to 134% as compared with 127% in 2022.

Taking into consideration that the dividend distribution policy calls for an annual distribution of up to 50% of the annual net profit, and given the background of uncertainty existing in global markets as well as in Israel, the Board of Directors of the Bank resolved to approve a dividend distribution totaling NIS 220 million, similar to that of the first quarter of 2023.

The efficiency ratio in the first half of the year was 42.6%, compared with 56.6% in the corresponding half of last year and 50.9% for 2022. The Bank continues to invest in efficiency measures, which include, among others, increasing efficiency of work procedures, integration of automation into work processes and technological innovations.

Total credit loss expenses in the first half of the year were NIS 171 million, as compared to NIS 31 million in the corresponding period last year, a growth of 450%. This growth was as a result of the group provision for credit losses.

In the first six months of the year, the collective provision increased by NIS 198 million, mainly due to adjustments in the collective provision following envisioned macro-economic concerns in light of the uncertainty relating to economic conditions, due to, among others, the impact of the rise in interest rates, developments in geopolitical conditions in Israel and globally, and the probability of an economic slowdown. The Bank continues to reinforce its cushions due to economic uncertainty. The specific provision for credit losses in the first half of the year was NIS 27 million, as compared to NIS 13 million in the corresponding period last year.

The low non-performing loan (NPL) ratio of the Bank, a ratio indicating the quality of the credit portfolio (the ratio of balance of nonaccrual debts or debts in arrears of 90 days and over, as a portion of total credit to the public), improved and descended to 0.49%, in relation to 0.55% in the corresponding period last year. The ratio of the balance of allowance for credit losses to total nonaccrual credit reached 238%

The First International Bank announced a set of measures taken to assist customers in view of the rising interest rate in the economy, publishing a benefit package for private customers, which includes, among others: payment of interest on credit balances on current accounts at a rate of 1.8%-2.2%, reducing the interest charged on overdrafts by 2%, and granting a special interest credit of NIS 1,400 to borrowers of its prime track mortgage loans. The package is valid for a period of one year and applies automatically to customers that meet the criteria set out in the program.

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group, stated: "The First International Bank continues on its growth trend across the banks strategic business areas, including in the fields of fund and investment management, capital markets, business banking and retail banking, while focusing on various target populations.

"The growth is accompanied by continuing our orderly and consistent efficiency measures. All this while maintaining a high level of financial stability, commensurate risk management and building security cushions – both in respect of credit losses and in respect of capital, given the rise in the level of economic uncertainty in Israel and globally."

 

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES


Principal financial ratios


For the six months
ended June 30,


For the year ended
December 31,



2023


2022


2022







in %

Execution indices







Return on equity attributed to shareholders of the Bank(1)

22.6

13.3

16.6

Return on average assets(1)

1.22

0.73

0.89

Ratio of equity capital tier 1

10.64

10.15

10.42

Leverage ratio

5.20

5.02

5.19

Liquidity coverage ratio

134

125

127

Net stable funding ratio

134

134

133

Ratio of total income to average assets(1)

3.4

2.6

2.9

Ratio of interest income, net to average assets(1)

2.6

1.8

2.0

Ratio of fees to average assets(1)

0.8

0.8

0.8

Efficiency ratio

42.6

56.6

50.9

Credit quality indices




Ratio of provision for credit losses to credit to the public

1.12

0.98

1.02

Ratio of total provision for credit losses(2) to credit to the public

1.23

1.08

1.12

Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public

0.49

0.55

0.48

Ratio of provision for credit losses to total non-accruing credit to the public

237.9

184.7

219.7

Ratio of net write-offs to average total credit to the public(1)

-

0.04

0.03

Ratio of expenses for credit losses to average total credit to the public(1)

0.29

0.06

0.11

 

Principal data from the statement of income


For the six months
ended June 30,



2023


2022





NIS million

Net profit attributed to shareholders of the Bank


1,218


664

Interest Income, net

2,593

1,603

Expenses from credit losses

171

31

Total non-Interest income

842

775

   Of which: Fees

756

755

Total operating and other expenses

1,464

1,346

   Of which: Salaries and related expenses

915

815

Primary net profit per share of NIS 0.05 par value (NIS)

12.14

6.62

 

Principal data from the balance sheet


30.6.23


30.6.22


31.12.22







NIS million

Total assets


208,130


192,026


195,955

of which: Cash and deposits with banks

58,553

56,305

57,130

               Securities

22,963

15,349

16,010

               Credit to the public, net

118,686

112,811

115,961

Total liabilities

196,313

181,606

184,920

of which: Deposits from the public

179,013

164,539

168,269

               Deposits from banks

4,145

5,429

4,821

               Bonds and subordinated capital notes

4,713

4,187

4,749

Capital attributed to the shareholders of the Bank

11,292

9,973

10,559

 

Additional data


30.6.23


30.6.22


31.12.22

Share price (0.01 NIS)


14,420


13,010


13,900

Dividend per share (0.01 NIS)

486

538

942

 

(1) Annualized.
(2) Including provision in respect of off-balance sheet credit instruments.

 

CONSOLIDATED STATEMENT OF INCOME
(NIS million)













For the three months
ended June 30


For the six months
ended June 30


For the year Ended
December 31



2023


2022


2023


2022


2022


(unaudited)

(unaudited)

(unaudited)

(unaudited)


(audited)

Interest Income


2,523


1,104


4,699


1,975


5,161

Interest Expenses

1,205

245

2,106

372

1,358

Interest Income, net

1,318

859

2,593

1,603

3,803

Expenses from credit losses

99

31

171

31

123

Net Interest Income after expenses from credit losses

1,219

828

2,422

1,572

3,680

Non- Interest Income






Non-Interest Financing income (expenses)

43

(22)

79

12

113

Fees

368

371

756

755

1,489

Other income

6

-

7

8

9

Total non- Interest income

417

349

842

775

1,611

Operating and other expenses






Salaries and related expenses

466

401

915

815

1,680

Maintenance and depreciation of premises and equipment

83

82

167

163

332

Amortizations and impairment of intangible assets

30

28

60

55

113

Other expenses

161

151

322

313

630

Total operating and other expenses

740

662

1,464

1,346

2,755

Profit before taxes

896

515

1,800

1,001

2,536

Provision for taxes on profit

307

179

622

348

884

Profit after taxes

589

336

1,178

653

1,652

The bank's share in profit of equity-basis investee, after taxes

19

20

84

37

74

Net profit:






Before attribution to non–controlling interests

608

356

1,262

690

1,726

Attributed to non–controlling interests

(21)

(14)

(44)

(26)

(59)

Attributed to shareholders of the Bank

587

342

1,218

664

1,667









NIS

Primary profit per share attributed to the shareholders
of the Bank











Net profit per share of NIS 0.05 par value

5.85

3.41

12.14

6.62

16.62

 

STATEMENT OF COMPREHENSIVE INCOME
(NIS million)













For the three months
ended June 30


For the six months
ended June 30


For the year Ended
December 31



2023


2022


2023


2022


2022



(unaudited)


(unaudited)


(unaudited)


(unaudited)


(audited)

Net profit before attribution to non–controlling interests


608


356


1,262


690


1,726

Net profit attributed to non–controlling interests

(21)

(14)

(44)

(26)

(59)

Net profit attributed to the shareholders of the Bank

587

342

1,218

664

1,667

Other comprehensive income (loss) before taxes:






Adjustments of available for sale bonds to fair value, net

56

(161)

26

(377)

(441)

Adjustments of liabilities in respect of employee benefits(1)

6

65

3

196

235

Other comprehensive income (loss) before taxes

62

(96)

29

(181)

(206)

Related tax effect

(22)

32

(11)

62

71

Other comprehensive income (loss) before attribution to non–controlling interests, after taxes

40

(64)

18

(119)

(135)

Less other comprehensive income (loss) attributed to non–controlling interests

3

(4)

5

(9)

(13)

Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes

37

(60)

13

(110)

(122)

Comprehensive income before attribution to non–controlling interests

648

292

1,280

571

1,591

Comprehensive income attributed to non–controlling interests

(24)

(10)

(49)

(17)

(46)

Comprehensive income attributed to the shareholders of the Bank

624

282

1,231

554

1,545

(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,



2023


2022


2022


(unaudited)

(unaudited)

(audited)

Assets







Cash and deposits with banks

58,553

56,305

57,130

Securities

22,963

15,349

16,010

Securities which were borrowed

104

289

12

Credit to the public

120,028

113,932

117,156

Provision for Credit losses

(1,342)

(1,121)

(1,195)

Credit to the public, net

118,686

112,811

115,961

Credit to the government

961

939

866

Investment in investee company

751

669

687

Premises and equipment

880

904

902

Intangible assets

309

300

317

Assets in respect of derivative instruments

3,588

2,880

2,825

Other assets(2)

1,335

1,580

1,245

Total assets

208,130

192,026

195,955

Liabilities and Shareholders' Equity




Deposits from the public

179,013

164,539

168,269

Deposits from banks

4,145

5,429

4,821

Deposits from the Government

608

570

237

Bonds and subordinated capital notes

4,713

4,187

4,749

Liabilities in respect of derivative instruments

3,184

2,412

2,322

Other liabilities(1)(3)

4,650

4,469

4,522

Total liabilities

196,313

181,606

184,920

Capital attributed to the shareholders of the Bank

11,292

9,973

10,559

Non-controlling interests

525

447

476

Total equity

11,817

10,420

11,035

Total liabilities and shareholders' equity

208,130

192,026

195,955

(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 137 million and NIS 109 million and NIS 117 million at 30.6.23, 30.6.22 and 31.12.22, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 12 million and NIS 283 million and NIS 26 million at 30.6.23, 30.6.22 and 31.12.22, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 24 million and NIS 337 million and NIS 26 million at 30.6.23, 30.6.22 and 31.12.22, respectively.

 

STATEMENT OF CHANGES IN EQUITY
(NIS million)

 



For the three months ended June 30, 2023 (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 March 31, 2023

927

(327)

10,288

10,888

501

11,389

Net profit for the period

-

-

587

587

21

608

Dividend

-

-

(220)

(220)

-

(220)

Other comprehensive income, after tax effect

-

37

-

37

3

40

Balance as at June 30, 2023

927

(290)

10,655

11,292

525

11,817

 
















For the three months ended June 30, 2022 (unaudited)



Share capital and premium(1)


Accumulated other comprehensive loss


Retained earnings(2)


Total share-holders' equity


Non- controlling interests


Total equity

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 six months ended June 30, 2023 (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, 2022 (audited)

927

(303)

9,935

10,559

476

11,035

Adjustment of the opening balance, net of tax, due to the effect of initial implementation in investee company*

-

-

(10)

(10)

-

(10)

Adjusted balance at January 1, 2022, following initial implementation

927

(303)

9,925

10,549

476

11,025

Net profit for the period

-

-

1,218

1,218

44

1,262

Dividend

-

-

(488)

(488)

-

(488)

Other comprehensive income, after tax effect

-

13

-

13

5

18

Balance as at June 30, 2023

927

(290)

10,655

11,292

525

11,817

 



For the six months ended June 30, 2022 (unaudited)



Share capital and premium(1)


Accumulated other comprehensive loss


Retained earnings(2)


Total share-holders' equity


Non- controlling interests


Total equity

Balance as at December 31, 2021 (audited)

927

(181)

9,257

10,003

434

10,437

Adjustment of the opening balance, net of tax, due to the effect of initial implementation*

-

-

(44)

(44)

(4)

(48)

Adjusted balance at January 1, 2022, following initial implementation

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

 

STATEMENT OF CHANGES IN EQUITY (CONT'D) 
(NIS million) 



For the year ended December 31, 2022 (audited)



Share capital and premium(1)


Accumulated other comprehensive loss


Retained earnings(2)


Total


Non- controlling interests


Total equity

Balance as at December 31, 2021

927

(181)

9,257

10,003

434

10,437

Adjustment of the opening balance, net of tax, due to the effect of initial implementation*

-

-

(44)

(44)

(4)

(48)

Adjusted balance at January 1, 2022, following initial implementation

927

(181)

9,213

9,959

430

10,389

Net profit for the period

-

-

1,667

1,667

59

1,726

Dividend

-

-

(945)

(945)

-

(945)

Other comprehensive loss, after tax effect

-

(122)

-

(122)

(13)

(135)

Balance as at December 31, 2022

927

(303)

9,935

10,559

476

11,035

 

*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
e-mail: zucker.d@fibi.co.il
Tel: +972-3-519-6224

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SOURCE First International Bank of Israel