Bank Leumi reported a stellar performance in the second quarter, with earnings of NIS 2.45 billion

The Israeli banking sector has witnessed impressive growth in the second quarter of 2023, with several major banks reporting substantial increases in profits and market value. Bank Leumi, managed by Hanan Friedman, emerged as a standout performer, while Bank Mizrahi Tefahot, led by Moshe Larry, also achieved remarkable financial results.

Bank Leumi reported a stellar performance in the second quarter, with earnings of NIS 2.45 billion, marking a remarkable 23% increase compared to the same period last year. Notably, the bank's market value surged to NIS 2.6 billion, reflecting a remarkable 40% boost in stock value. Despite a slight decrease of 4.6% in the first half of 2023, attributed to a NIS 1 billion write-off from investments in National Valley during the first quarter, the bank's strong overall performance positioned it as a leading player in the industry.

The bank's board of directors approved a dividend distribution of NIS 736 million and the acquisition of shares amounting to NIS 300 million. Private customer deposits also experienced a healthy 5% increase, reaching NIS 166 billion, driven by competitive interest rates. However, provisions for problematic debts saw an increase from NIS 126 million to NIS 318 million, reflecting the bank's cautious approach in managing risks.

Bank Mizrahi Tefahot, under the leadership of Moshe Larry, showcased an impressive performance as well. The bank reported an impressive 32.8% increase in profits, earning NIS 1.4 billion in the second quarter compared to the same period in the previous year. For the first half of 2023, the bank's profits increased by 25.3% to NIS 2.76 billion, representing a substantial return of 22.2% on the equity capital of NIS 25.8 billion.

The bank's decision to distribute a dividend of NIS 489 million, equivalent to 35% of the quarterly profit, garnered attention within the industry. Notably, financing revenues surged by 41.3% to NIS 2.96 billion in the second quarter, contributing to an overall 50% increase in financing revenues for the first half of the year, totaling NIS 5.9 billion. However, expenses for credit losses also rose, reaching NIS 474 million from NIS 186 million in the prior year.

The international bank, managed by Eli Cohen, achieved an impressive 71.6% increase in profits for the second quarter, amounting to NIS 587 million. This growth trend continued into the first half of 2023, with profits soaring by 83.4% to NIS 1.22 billion. The bank's profitability, which translated to a return of 22.6% on capital totaling NIS 11 billion, marked a notable achievement within the banking sector.

Despite the favorable interest rate environment, the bank's conservative dividend policy remained intact. A dividend of NIS 220 million was decided upon by the board, showcasing the bank's prudent approach to financial management. Notably, customer deposits rose by 8.8% to NIS 179 billion, attributing this growth to strategic customer transfers and the appeal of higher interest rates.

The strong financial performances of these banks underscored the resilience and adaptability of the Israeli banking sector amid changing market dynamics. With prudent financial management, robust customer engagement strategies, and a cautious approach to risk management, these institutions continue to drive growth and stability in the Israeli economy.