Israeli Banks Report Robust Profits Despite War: Mizrahi Tefahot and International Bank Lead Growth

Amidst the turmoil of the 2023 war, Israel's banking sector has shown remarkable resilience, with profits soaring to new heights. The net profit of the four largest banks in Israel surged by 15% compared to the previous year, reaching a staggering NIS 25.5 billion. Despite the challenges posed by the conflict, profits remained steady, underscoring the strength of the banking system.

The recently released reports of Bank Mizrahi Tefahot and the International Bank highlight their exceptional performance in 2023. Bank Mizrahi Tefahot, under the leadership of Moshe Larry, reported a remarkable 9.8% increase in profits, reaching NIS 4.91 billion. Despite heightened provisions for credit losses due to the war, the bank achieved extraordinary profitability, with a return on capital of 19.1%. The bank's financing revenues surged by 23.5%, contributing significantly to its stellar performance. However, dividend distribution was constrained by banking supervision regulations, with a dividend of NIS 209.4 million in the last quarter and NIS 1.27 billion for the year.

Meanwhile, the International Bank, managed by Eli Cohen, witnessed a remarkable 30.3% jump in profits, totaling NIS 2.17 billion. With a return on capital of 19.7%, the bank boasted the highest profitability in the sector. Robust revenue growth, particularly in financing profits which increased by 28.3% to NIS 5.15 billion, drove the bank's exceptional performance. Despite a modest rise in expenses for credit losses, the bank's profitability remained outstanding. The board's decision to distribute a dividend of NIS 269 million in the last quarter reflects the bank's strong financial position.

Looking ahead, the banking sector is poised for continued growth, with Bank Leumi set to release its reports next week. Despite the challenges of the past year, Israeli banks have demonstrated resilience and agility, positioning themselves for sustained success in the future.