Le Lézard
Classified in: Business
Subjects: ERN, ACC

First International Bank of Israel Presents Second Quarter 2019 Results


TEL AVIV, Israel, Aug. 13, 2019 /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 2019.

Financial Highlights 

Profitability

In the first half of 2019, net earnings of the First International Bank Group increased by 14.3% year-over-year, amounting to NIS 407 million. Return on equity reached 10.2% as compared with 9.3% in the corresponding period last year and for the whole of 2018.

In the second quarter of 2019, net earnings amounted to NIS 224 million, an increase of 2.3% year-over-year, and return on equity reached 11.3%. After elimination of certain components in the corresponding quarter last year (a gain of NIS 33 million on the sale of assets and expenses of NIS 7 million in respect of the merger with Otzar Hachayal Bank), net earnings for the quarter increased by 16.1%.  

Growth

Financing profit increased in the first half of the year by 9.8% to NIS 1,412 million, and in the second quarter of the year, increased by 7.3% in comparison with the corresponding period last year. Credit to the public, net, increased in comparison with the corresponding period last year by 3.1% (a growth of 4.1% in average balances) amounting to NIS 85,549 million. Credit loss expenses amounted to 0.14% of the amount of credit to the public, in contrast to a rate of 0.20% in the corresponding period last year.

Efficiency

The Bank continued to improve its efficiency parameters: the efficiency ratio improved to 65.9% in the first half of the year, as compared with a ratio of 68.8% in the corresponding period last year. Operating and other expenses decreased in the first half of the year by 2.9% as compared with the corresponding period last year, amounting to NIS 1,351 million.

The decrease in expenses can be seen across all the various expense items: payroll and related benefits ? a decrease of 1.7%, depreciation and maintenance of buildings and equipment ? a decrease of 5.3% and other expenses ? a decrease of 5.6%.

Financial Stability and Dividend Distribution

The Tier I equity capital ratio reached 10.86%, and the comprehensive capital ratio reached 13.86%.

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 a dividend of NIS 190 million. The dividend yield reached 4.6%. Subsequent to the date of the financial statements the Board of Directors of the Bank 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 results for the first half of the year reflect the continued trend by which we have seen for quite some time, demonstrating growth in income and reduction in expenses, with a strict maintenance of the high financial stability of the Bank. The improvement in efficiency at the Bank is the outcome of the efficiency measures which we have taken, which are being reflected gradually, mainly following the merger with Otzar Hachayal Bank and the retirement of employees under voluntary retirement plans. Given our growth and efficiency processes, as well as our high and continuous financial stability recently led to both credit rating agencies that rate the Bank, S&P Ma'alot and Midrug, to raise the deposit ratings of the Bank to a level of AAA."  

 

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES















Principal financial ratios


For the six months
ended June 30,


For the year
ended
December 31,



2019


2018


2018







in %

Execution indices







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

10.2%

9.3%

9.3%

Return on average assets(1)

0.6%

0.5%

0.5%

Ratio of equity capital tier 1

10.86%

10.10%

10.51%

Leverage ratio

5.92%

5.61%

5.76%

Liquidity coverage ratio

123%

118%

122%

Ratio of total income to average assets(1)

3.0%

3.0%

3.1%

Efficiency ratio

65.9%

68.8%

68.4%





Credit quality indices




Ratio of provision for credit losses to credit to the public

1.03%

1.03%

1.02%

Ratio of impaired debts or in arrears of 90 days or more to credit to the public

0.89%

0.93%

0.83%

Ratio of provision for credit losses to total impaired credit to the public

168%

165%

186%

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

0.09%

0.11%

0.16%

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

0.14%

0.20%

0.20%






Principal data from the statement of income


For the six months
ended June 30,



2019


2018





NIS million

Net profit attributed to shareholders of the Bank                                                                                        


407


356

Interest Income, net

1,300

1,199

Expenses from credit losses

59

81

Total non-Interest income

749

825

  Of which: Fees

635

663

Total operating and other expenses

1,351

1,392

  Of which: Salaries and related expenses

821

835

                  Dismissals expenses

31

14

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

4.06

3.55








Principal data from the balance sheet






As of



30.6.19


30.6.18


31.12.18







NIS million

Total assets


135,067


134,254


134,120

of which: Cash and deposits with banks                                                                       

33,900

33,090

31,303

         Securities

10,587

11,919

12,595

         Credit to the public, net

85,549

82,951

84,292

Total liabilities

126,362

125,989

125,707

of which: Deposits from the public

113,716

112,555

111,697

         Deposits from banks

954

460

1,150

         Bonds and subordinated capital notes

4,034

5,012

4,989

Capital attributed to the shareholders of the Bank

8,366

7,961


8,093








Additional data


30.6.19


30.6.18


31.12.18

Share price (0.01 NIS)


8,960


7,635


7,860

Dividend per share (0.01 NIS)

190

155

355

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

1.9%

1.8%

1.9%

Ratio of fees to average assets (in %)(1)

0.9%

1.0%

1.0%


(1)   Annualized.


 

 

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



2019


2018


2019


2018


2018


(unaudited)

(unaudited)

(unaudited)

(unaudited)


(audited)

Interest Income


911


819


1,638


1,473

3,001

Interest Expenses

246

204

338

274

515

Interest Income, net

665

615

1,300

1,199

2,486

Expenses from credit losses

23

54

59

81

166

Net Interest Income after expenses from credit losses

642

561

1,241

1,118

2,320

Non- Interest Income






Non-Interest Financing income

66

47

112

87

231

Fees

315

325

635

663

1,325

Other income

1

52

2

75

81

Total non- Interest income

382

424

749

825

1,637

Operating and other expenses






Salaries and related expenses

419

389

821

835

1,696

Maintenance and depreciation of premises 
    and equipment

88

94

180

190

376

Amortizations and impairment of intangible assets

23

22

46

45

91

Other expenses

148

150

304

322

656

Total operating and other expenses

678

655

1,351

1,392

2,819

Profit before taxes

346

330

639

551

1,138

Provision for taxes on profit

127

117

238

199

408

Profit after taxes

219

213

401

352

730

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

14

13

24

19

37

Net profit:






Before attribution to non?controlling interests

233

226

425

371

767

Attributed to non?controlling interests

(9)

(7)

(18)

(15)

(34)

Attributed to shareholders of the Bank

224

219

407

356

733









NIS

Primary profit per share attributed to the 
     shareholders 
     of the Bank











Net profit per share of NIS 0.05 par value

2.24

2.18

4.06

3.55

7.31


The notes to the financial statements are an integral part thereof. 

 

 

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



2019


2018


2019


2018


2018



(unaudited)


(unaudited)


(unaudited)


(unaudited)


(audited)

Net profit before attribution to non?controlling interests


233


226


425


371


767

Net profit attributed to non?controlling interests

(9)

(7)

(18)

(15)

(34)

Net profit attributed to the shareholders of the Bank

224

219

407

356

733

Other comprehensive income (loss) before taxes:






Adjustments of available for sale bonds (2018 - securities) to fair value, 
   net

10

(28)

76

(70)

(102)

Adjustments of liabilities in respect of employee benefits(1)

20

71

12

78

37

Other comprehensive income (loss) before taxes

30

43

88

8

(65)

Related tax effect

(11)

(14)

(31)

(3)

22

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

19

29

57

5

(43)

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

-

(1)

1

(1)

(4)

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

19

30

56

6

(39)

Comprehensive income before attribution to non?controlling interests

252

255

482

376

724

Comprehensive income attributed to non?controlling interests

(9)

(6)

(19)

(14)

(30)

Comprehensive income attributed to the shareholders of the Bank

243

249

463

362

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.  


The notes to the financial statements are an integral part thereof. 

 

 

CONSOLIDATED BALANCE SHEET

(NIS million)












June 30,


December
31,



2019


2018


2018


(unaudited)

(unaudited)

(audited)

Assets




Cash and deposits with banks

33,900

33,090

31,303

Securities

10,587

11,919

12,595

Securities which were borrowed

416

550

863

Credit to the public

86,436

83,811

85,160

Provision for Credit losses

(887)

(860)

(868)

Credit to the public, net

85,549

82,951

84,292

Credit to the government

684

681

700

Investments in investee company

589

585

606

Premises and equipment

1,001

1,031

1,023

Intangible assets

228

227

239

Assets in respect of derivative instruments

938

1,263

1,399

Other assets(2)

1,175

1,950

1,100

Assets held for sale

-

7

-

Total assets

135,067

134,254

134,120

Liabilities and Shareholders' Equity




Deposits from the public

113,716

112,555

111,697

Deposits from banks

954

460

1,150

Deposits from the Government

466

613

982

Bonds and subordinated capital notes

4,034

5,012

4,989

Liabilities in respect of derivative instruments

1,104

1,124

1,294

Other liabilities(1)(3)

6,088

6,225

5,595

Total liabilities

126,362

125,989

125,707

Capital attributed to the shareholders of the Bank

8,366

7,961

8,093

Non-controlling interests

339

304

320

Total equity

8,705

8,265

8,413

Total liabilities and shareholders' equity

135,067

134,254

134,120


(1)   Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 65 million and NIS 74 
        million and NIS 64 million at 30.6.19, 30.6.18 and 31.12.18, respectively.

(2)   Of which: other assets measured at fair value in the amount of NIS 543 million and NIS 1,289 million and NIS 426 million at 30.6.19, 
        30.6.18 and 31.12.18, respectively.

(3)   Of which: other liabilities measured at fair value in the amount of NIS 847 million and NIS 1,485 million and NIS 586 million at 
        30.6.19, 30.6.18 and 31.12.18, respectively.


The notes to the financial statements are an integral part thereof.

 

 

STATEMENT OF CHANGES IN EQUITY

(NIS million)







For the three months ended June 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 March 31, 2019

927

(114)

7,395

8,208

330

8,538

Net profit for the period

-

-

224

224

9

233

Dividend

-

-

(85)

(85)

-

(85)

Other comprehensive income, after tax effect

-

19

-

19

-

19

Balance as at June 30, 2019

927

(95)

7,534

8,366

339

8,705

 
















For the three months ended June 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 March 31, 2018

927

(144)

6,989

7,772

298

8,070

Net profit for the period

-

-

219

219

7

226

Dividend

-

-

(60)

(60)

-

(60)

Other comprehensive income (loss), after tax effect

-

30

-

30

(1)

29

Balance as at June 30, 2018

927

(114)

7,148

7,961

304

8,265

 
















For the six months ended June 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

-

-

407

407

18

425

Dividend

-

-

(190)

(190)

-

(190)

Other comprehensive income, after tax effect

-

56

-

56

1

57

Balance as at June 30, 2019

927

(95)

7,534

8,366

339

8,705

 
















For the six months ended June 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

-

-

356

356

15

371

Dividend

-

-

(155)

(155)

-

(155)

Other comprehensive income (loss), after tax effect

-

6

-

6

(1)

5

Temporary equity ? non-controlling interest

-

-

(2)

(2)

-

(2)

Balance as at June 30, 2018

927

(114)

7,148

7,961

304

8,265

 

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). See also Note 1.D.(1).


The notes to the financial statements are an integral part thereof.

 

 

 

Contact:  
Dafna Zucker     
First International Bank of Israel    
e-mail: zucker.d@fibi.co.il    
Tel: +972-3-519-6224 

Ehud Helft  
GK Investor & Public Relations  
e-mail: fibi@gkir.com 
Tel: +1-646-201-9246

 

 

 

SOURCE First International Bank of Israel


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