Mizrahi Tefahot Bank presents: 7% erosion in net profit which reached NIS 422 million

Mizrahi Tefahot Bank ended the third quarter with a 7% erosion in net profit, which reached NIS 422 million. Alongside the reports, the Bank announced a distribution of a dividend of approximately NIS 169 million to shareholders, following a distribution of nearly NIS 400 million that it made after the publication of the previous reports - which came after four quarters without distribution.
In the background of a change in the direction of dividend distribution, earlier this year the bank reached an agreement with the US tax authorities regarding the closure of the tax evasion assistance case to its American customers, with a $ 195 million fine.
In the first nine months of the year, Mizrahi Tefahot's profits jumped 40% to NIS 1.4 billion. With the impact of the US investigation on the bank's results in 2018, and excluding the bank's last year's provision for the investigation, the bottom line improvement in the first nine months of this year is about 10%. In the third quarter of 2018, the Bank recorded no provisions for the investigation.
Mizrahi Tefahot presents a quarterly return on equity of 11.1%, compared with 13.4% in the corresponding quarter, but in the nine months of the year the trend is reversed, with return on equity of 12.4%, compared with 9.7%.
At the end of September, Mizrahi Tefahot's public credit portfolio stood at NIS 202.5 billion, a nearly 7% improvement in its volume in the corresponding quarter of last year, after reaching a threshold of NIS 200 billion for the first quarter of the current year (the second quarter).
Mizrahi Tefahot's expenses for credit losses totaled NIS 70 million in the third quarter, compared with NIS 61 million in the corresponding quarter, while in the first three quarters of 2019 these expenses accumulated to NIS 245 million, a 5% increase over the corresponding period last year.
Top line, Mizrahi Tefahot enjoyed a 1.5% improvement in its financing income, which reached NIS 1.36 billion, thanks to a positive trend in non-interest financing income and despite the erosion of net interest income - which constitutes the bulk of the bank's financing income. Between January and September, the bank's financing revenues grew by more than 7%, approaching NIS 4.3 billion.
Mizrahi Tefahot Bank is Israel's largest mortgage bank, and this area, as expected, yielded the largest contribution to net profit, which amounted to NIS 154 million - an 8% improvement over the corresponding quarter.