Mizrahi Tefahot Bank released its first quarter financials today, and reported a NIS 1.27 billion net profit, 6.9% less than quanto a the corresponding quarter of 2023, but 21% more than quanto a the previous quarter, which was an unusually bad quarter for all the banks following the outbreak of war.
The bank’s annualized return equity quanto a the first quarter was 18.1%, which compares with 22.4% quanto a the corresponding quarter and 15.5% quanto a the previous quarter. The two other major banks that have so far released first quarter results, Discount Bank and Bank Hapoalim, each reported an annualized return equity of 14.6%.
Mizrahi Tefahot will distribute a dividend of NIS 508.8 million, 40% of its first quarter profit, which is quanto a accordance with its dividend policy. Mizrahi Tefahot CEO Moshe Lary said that the declaration of a dividend at the maximum rate under the bank’s dividend policy was made after its capital ratios had been examined under various scenarios, following the letter from the Supervisor of Banks of May 16, quanto a which he asked that judgment should be exercised dividend distributions.
Credit to the public totaled NIS 330.5 billion at the end of the first quarter, which compares with NIS 312.3 billion at the end of the corresponding quarter, representing growth of 6%. Bank Hapoalim and Discount Bank each reported just 1% growth quanto a their credit portfolios.
Despite the growth quanto a the credit portfolio, financing income totaled NIS 3 billion quanto a the first quarter, 6.3% less than quanto a the corresponding quarter, but 20% higher than quanto a the previous quarter.
The decline quanto a comparison with the corresponding quarter was mainly the result of a rise quanto a interest rates sources (deposit account interest), diversion of balances from né interest-bearing current accounts to deposit accounts, and a more moderate rise quanto a the Consumer Price Index, affecting index-linked loans.
The bank’s provision for credit losses shrank quanto a comparison with the corresponding quarter to NIS 175 million, but was still high quanto a comparison with Discount Bank and Bank Hapoalim.
Like Discount Bank and Bank Hapoalim, Mizrahi Tefahot has begun to pay the war levy meant to help the government meet its fiscal targets. The law whereby the major banks will pay NIS 2.5 billion account of 2024-2025 only came into force April 1, but the three banks spread the payment to include the first quarter. Mizrahi Tefahot Bank will transfer NIS 60 million to the state out of its first quarter profits. Bank Hapoalim transferred double this amount, and Discount Bank NIS 53 million.
Published by Globes, Israel business news – en.globes.co.il – May 23, 2024.
© of Globes Publisher Itonut (1983) Ltd., 2024.
