Bank Leumi: Profit of of NIS 1.6 billion in the first quarter - an increase of 23%

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by Ifi Reporter Category:Banking May 24, 2022

A very successful start to the year for Bank Leumi. According to the Bank's report for the first quarter of 2022 published on Tuesday, its net profit amounted to NIS 1.6 billion, an increase of 23% compared to NIS 1.3 billion in the corresponding quarter last year. In light of the profit, Leumi will distribute dividends to shareholders in the amount of NIS 322 million, which constitute 20% of the net profit.
Leumi also enjoyed growth in credit portfolios in the business (11.2%), commercial (9.7%) and mortgage (4.2%) sectors. As a result, as well as the index gaps, the Bank's interest income rose from NIS 2.3 billion in the first quarter of 2021 to NIS 2.9 billion in the first quarter of 2022.
The bank also reported the sale of Beit Mani, one of its headquarters buildings in Tel Aviv, which is expected to generate a capital gain before tax of NIS 524 million. Another lucrative deal for Leumi was the merger between LEUMI USA and VALLEY NATIONAL BANK, as a result of which a net tax profit of NIS 645 million will be recorded (NIS 194 million was recorded during the current report and the rest will be recorded in the second quarter of the year).
At the same time, the bank's income from non-interest-bearing financing amounted to only NIS 14 million, a significant decrease compared to the first quarter of 2021, when it stood at NIS 441 million. Leumi claims that the decrease in revenues is due to the declines in the capital markets and the effect of derivatives and exchange rate differences.
Mizrahi Tefahot Bank also published financial statements for the first quarter of 2022 today, according to which it reached a net profit of NIS 1.154 billion. This is a quarterly record profit and a huge increase of 70.7% compared to the profit in the corresponding quarter last year - which stood at NIS 676 million.
This, after recording a 13.4% increase in credit to the public compared to the corresponding quarter in 2021, an increase of 16.3% in financing income from current operations and an increase of 9% in commission income. In addition, the Bank reported a 21.9% increase in return on equity. On the other hand, the bank also recorded a 3.5% increase in operating and other expenses, which amounted to NIS 1.388 billion.
Nevertheless, the bank decided not to distribute a dividend. Moshe Larry, the bank's CEO, claimed that the reason for this was "in order to maintain a sufficient level of capital, which would allow it to continue the growth momentum and cope optimally with the increased demand for credit."
As for the merger with Union Bank, the bank claims that so far 16 of the union's 35 branches have been closed and tens of thousands of customers have been converted to Mizrahi-Tefahot branches. The completion of the Mizo is planned for the end of the year, when 11 more branches will be closed. At the same time, Union Bank's contribution to the Group's profits amounted to NIS 212 million in the first quarter, which mainly includes capital gains from the sale of assets.
Meanwhile, the International Bank also reported today the financial results for the first quarter of the year, according to which it recorded a net profit of NIS 322 million - an increase of 5.9% compared to the corresponding quarter last year. Accordingly, the Board of Directors approved the distribution of a dividend at a rate of 50% of the net profit.
The Bank also reported a return on equity of 13%, a growth of 5% in credit to the public, an increase of 11% in net interest income and 6.4% in commission income.

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