First International Bank Of Israel Reports Financial Results For The Second Quarter Of 2024

2024-08-15 06:35:02

(MENAFN- PR Newswire) Reflects continued growth and high profitability while maintaining financial stability

TEL AVIV, Israel, Aug. 15, 2024 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the second quarter and first half of 2024, ended June 30, 2024.

Financial Highlights

Second quarter of 2024 net income of
NIS 609 million and return on equity of 19.6%
First half 2024 net income of
NIS 1,178 million and return on equity of 19.2%
Credit to the public increased 4.5% compared to end of the first quarter of 2024 and 2.4% compared to 2023-end
First half 2024 income from credit losses of approximately NIS 73 million, compared to expenses of NIS 171 million in the first half of 2023 with approximately half of the income from collections from previously written-off customer debt
Deposit to the public increased by 3.8% compared to the first quarter of 2024, and by 6.8% compared to the 2023-end.
The portfolio of customers' assets increased 4.8% compared to the first quarter of 2024, and by 12.4% compared to the 2023-end, to approximately NIS 755 billion.
Equity attributed to shareholders of the Bank increased by 11.7% to
NIS 12.6 billion,
compared to the end of the first half of 2023
Tier 1 capital ratio was 11.34%
The Bank's Board of Directors decided to distribute a dividend amounting to 40% of the net income for the quarter

Financial Results of the Second Quarter 2024

Net income
for the First International Bank Group was NIS 609 million in the second quarter of 2024, an increase of 3.7 % compared to the second quarter last year and an increase/decrease of 7 % compared to the prior quarter. The return on equity was 19.6%. The net income for the first half of the year was NIS 1,178 million and the return on equity was 19.2%.

Revenues
were NIS 3,220 million in the first half of the year, compared to NIS 3,435 million in the first half of last year. The financing income from operating activities amounted to NIS 2,435 million in the first half of the year, compared to NIS 2,682 million in the first half of last year, a decrease of 9.2%. The decrease was due, among other factors, by customers shifting funds into interest-bearing accounts, rather than maintaining non-interest-bearing current account balances.

Income from credit losses
amounted to NIS 73 million in the first half of the year, compared with expenses of NIS 171 million in the first half of last year. Approximately NIS 40 million of the income was due to income from specific customers from the collection of debts that had been previously written off in the financial accounts, with the balance due to a decrease in the collective provision for credit losses. In the second quarter of 2024, the income from credit losses amounted to NIS 71 million compared with expenses of NIS 99 million in the prior quarter.

The high-quality credit to non-performing loans ratio (NPL) was stable and was 0.59% at the end of the second quarter. The ratio indicates the quality of the credit portfolio (the balance of the non-accrual loans or those that are in arrears of 90 days or more) as a percentage of total credit to the public. The total coverage ratio (the percentage of the total allowance for credit losses to the total amount of the credit to the public) was 1.44%, compared to 1.23% as of the end of the first half of last year.

Operating and other expenses were stable at NIS 1,463 million in the first half of the year, compared to NIS 1,464 million in the first half of last year. The efficiency ratio was 45.4%.

Credit to the public
was approximately NIS 122 billion, an increase of 2.4% compared to the 2023-end and an increase of 4.5% compared to the end of the first quarter of 2024.

Deposits by the public
were approximately NIS 204.1 billion, an increase of 6.8% compared to the 2023-end and an increase of 3.8% compared to the end of the first quarter of 2024.

The total customers' assets portfolio
increased by 4.8% compared to the first quarter of 2024 and by 12.4% compared to the 2023-end, amounting to approximately NIS 755 billion.

Equity attributed to the Bank's shareholders increased to approximately NIS 12.6 billion, an increase of 4.5% compared to the 2023-end and increase by 11.7% compared to the end of the first half of last year. The tier 1 capital ratio was 11.34%, which is approximately 23% above the regulatory equity requirement. The liquidity coverage ratio was high and stood at 172%.

Taking into consideration the Supervisor of the Bank's directives with regard to capital planning and profit distribution policies, the Board of Directors decided to approve the distribution of a cash dividend to the shareholders at a rate of 40% of net income. The Board of Directors will continue to discuss the implementation of the Bank's dividend distribution policy, in light of the developments and their impact on the economy and on the Bank.

Management Comment

Eli Cohen, CEO of First International Bank , commented, "We continued to focus on growth across all types of activities and our results reflect this, both in terms of credit balances and in the volume of the customers' assets, which have grown in all segments. The growth in credit is being carried out while maintaining qualitative and professional underwriting and an appropriate level of risk. The overall value of our customers' balances has increased by more than 23% in the past year, reflecting the trust that our customers place in our stability and us.

"We at the First International Bank have a strategy of providing added value to customers through our unique value propositions, our new and innovative products, as well as our professional advice across all core activities and sectors.

The State of Israel has been going through a challenging period of warfare on multiple fronts for over 10 months, which is having significant and complex economic implications.
At the First International Bank, we hold the Otzar HaChayal brand, providing banking for the security forces, offering them the best banking value proposition. We are continuing to assist those customers who have been impacted directly by the security situation, including reserve soldiers, evacuees and others. Support includes waiving charges and interest on overdrafts, deferring repayments on loans and mortgages, offering interest-free loans to reservists and career soldiers, providing assistance funding to small businesses, and more.

The First International Bank looks forward to the safe return of all the hostages, as well as the safe return home of the IDF soldiers and all the evacuees."

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES

Principal financial ratios		For the six months ended June 30,		For the year ended December 31,
		2024		2023	2023
					in %
Principal execution indices
Return on equity attributed to shareholders of the Bank(1)	19.2	22.6	19.7
Return on average assets(1)	1.05	1.22	1.06
Ratio of equity capital tier 1	11.34	10.64	11.35
Leverage ratio	5.20	5.20	5.26
Liquidity coverage ratio	172	134	156
Net stable funding ratio	149	134	146
Ratio of total income to average assets (1)	2.9	3.4	3.2
Ratio of interest income, net to average assets (1)	2.1	2.6	2.4
Ratio of fees to average assets (1)	0.6	0.8	0.7
Efficiency ratio	45.4	42.6	43.5
Credit quality indices
Ratio of provision for credit losses to credit to the public	1.32	1.12	1.36
Ratio of total provision for credit losses (2) to credit to the public	1.44	1.23	1.50
Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public	0.59	0.49	0.60
Ratio of provision for credit losses to total non-accruing credit to the public	230.4	237.9	234.5
Ratio of net write-offs to average total credit to the public (1)	(0.08)	-	0.03
Ratio of expenses (income) for credit losses to average total credit to the public (1)	(0.12)	0.29	0.42


Principal data from the statement of income		For the six months ended June 30,
		2024	2023
			NIS million
Net profit attributed to shareholders of the Bank		1,178	1,218
Interest Income, net	2,336	2,593
Expenses (income) from credit losses	(73)	171
Total non-Interest income	884	842
Of which: Fees	727	756
Total operating and other expenses	1,463	1,464
Of which: Salaries and related expenses	872	915
Primary net profit per share of NIS 0.05 par value (NIS)	11.74	12.14


Principal data from the balance sheet		30.6.24		30.6.23	31.12.23
					NIS million
Total assets		232,809		208,130	221,593
of which: Cash and deposits with banks	77,663	58,553	68,866
Securities	27,237	22,963	26,985
Credit to the public, net	120,436	118,686	117,622
Total liabilities	219,604	196,313	208,947
of which: Deposits from the public	204,069	179,013	191,125
Deposits from banks	2,735	4,145	4,314
Bonds and subordinated capital notes	4,689	4,713	4,767
Capital attributed to the shareholders of the Bank	12,615	11,292	12,071


Additional data		30.6.24		30.6.23	31.12.23
Share price (0.01 NIS)		14,410		14,420	14,990
Dividend per share (0.01 NIS)	495	486	795

(1)
Annualized.
(2)
Including provision in respect of off-balance sheet credit instruments.

CONSOLIDATED STATEMENT OF INCOME
(NIS million)

		For the three months ended June 30		For the six months ended June 30		For the year Ended December 31
		2024		2023		2024	2023	2023
	(unaudited)	(unaudited)	(unaudited)	(unaudited)		(audited)
Interest Income		2,879		2,523		5,455	4,699	9,850
Interest Expenses	1,658	1,205	3,119	2,106	4,884
Interest Income, net	1,221	1,318	2,336	2,593	4,966
Expenses (income) from credit losses	(71)	99	(73)	171	502
Net Interest Income after expenses from credit losses	1,292	1,219	2,409	2,422	4,464
Non- Interest Income
Non-Interest Financing income	47	43	147	79	142
Fees	362	368	727	756	1,502
Other income	9	6	10	7	8
Total non- Interest income	418	417	884	842	1,652
Operating and other expenses
Salaries and related expenses	430	466	872	915	1,746
Maintenance and depreciation of premises and equipment	86	83	173	167	341
Amortizations and impairment of intangible assets	32	30	63	60	122
Other expenses	184	161	355	322	668
Total operating and other expenses	732	740	1,463	1,464	2,877
Profit before taxes	978	896	1,830	1,800	3,239
Provision for taxes on profit	364	307	643	622	1,090
Profit after taxes	614	589	1,187	1,178	2,149
The bank's share in profit of equity-basis investee, after taxes	22	19	40	84	113
Net profit:
Before attribution to non–controlling interests	636	608	1,227	1,262	2,262
Attributed to non–controlling interests	(27)	(21)	(49)	(44)	(90)
Attributed to shareholders of the Bank	609	587	1,178	1,218	2,172

		NIS
Primary profit per share attributed to the shareholders of the Bank
Net profit per share of NIS 0.05 par value	6.07	5.85	11.74	12.14	21.65

STATEMENT OF COMPREHENSIVE INCOME
(NIS million)

		For the three months ended June 30		For the six months ended June 30		For the year Ended December 31
		2024		2023		2024	2023	2023
		(unaudited)		(unaudited)		(unaudited)	(unaudited)	(audited)
Net profit before attribution to non‐controlling interests		636		608		1,227	1,262	2,262
Net profit attributed to non‐controlling interests	(27)	(21)	(49)	(44)	(90)
Net profit attributed to the shareholders of the Bank	609	587	1,178	1,218	2,172
Other comprehensive income (loss) before taxes:
Adjustments of available for sale bonds to fair value, net	(200)	56	(244)	26	213
Adjustments of liabilities in respect of employee benefits(1)	1	6	12	3	25
Other comprehensive income (loss) before taxes	(199)	62	(232)	29	238
Related tax effect	73	(22)	90	(11)	(81)
Other comprehensive income (loss) before attribution to non‐controlling interests, after taxes	(126)	40	(142)	18	157
Less other comprehensive income (loss) attributed to non‐controlling interests	(5)	3	(5)	5	9
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes	(121)	37	(137)	13	148
Comprehensive income before attribution to non‐controlling interests	510	648	1,085	1,280	2,419
Comprehensive income attributed to non‐controlling interests	(22)	(24)	(44)	(49)	(99)
Comprehensive income attributed to the shareholders of the Bank	488	624	1,041	1,231	2,320

(1)
Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits pension plans, of amounts recorded in the past in other comprehensive income.

CONSOLIDATED BALANCE SHEET
(NIS million)

		June 30,		December 31,
		2024		2023	2023
	(unaudited)	(unaudited)	(audited)
Assets
Cash and deposits with banks	77,663	58,553	68,866
Securities	27,237	22,963	26,985
Securities borrowed	30	104	57
Credit to the public	122,044	120,028	119,240
Provision for Credit losses	(1,608)	(1,342)	(1,618)
Credit to the public, net	120,436	118,686	117,622
Credit to the government	1,421	961	1,055
Investment in investee company	825	751	786
Buildings and equipment	859	880	877
Intangible assets	348	309	328
Assets in respect of derivative instruments	2,670	3,588	3,651
Other assets(2)	1,320	1,335	1,366
Total assets	232,809	208,130	221,593
Liabilities and Capital
Deposits from the public	204,069	179,013	191,125
Deposits from banks	2,735	4,145	4,314
Deposits from the Government	719	608	750
Securities lent or sold under agreements to repurchase	744	-	-
Bonds and subordinated capital notes	4,689	4,713	4,767
Liabilities in respect of derivative instruments	2,388	3,184	3,784
Other liabilities(1)(3)	4,260	4,650	4,207
Total liabilities	219,604	196,313	208,947
Shareholders' equity	12,615	11,292	12,071
Non-controlling interests	590	525	575
Total capital	13,205	11,817	12,646
Total liabilities and capital	232,809	208,130	221,593

(1)
Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 152 million and NIS 137 million and NIS 165 million at 30.6.24, 30.6.23 and 31.12.23, respectively.
(2)
Of which: other assets measured at fair value in the amount of NIS 3 million and NIS 12 million and NIS 10 million at 30.6.24, 30.6.23 and 31.12.23, respectively.
(3)
Of which: other liabilities measured at fair value in the amount of NIS 28 million and NIS 24 million and NIS 11 million at 30.6.24, 30.6.23 and 31.12.23, respectively.

STATEMENT OF CHANGES IN EQUITY

(NIS million)

For the three months ended June 30, 2024 (unaudited)

Share
capital and
premium (1)

Accumulated
other
comprehensive
loss

Retained
earnings (2)

Total
share-
holders'
equity

Non-
controlling
interests

Total
capital

Balance as of March 31, 2024

927

(171)

11,599

12,355

597

12,952

Net profit for the period

609

636

Dividend

(228)

(29)

(257)

Other comprehensive loss, after tax effect

(121)

(5)

(126)

Balance as at June 30, 2024

927

(292)

11,980

12,615

590

13,205


		For the three months ended June 30, 2023 (unaudited)
		Share capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)	Total share- holders' equity	Non- controlling interests	Total capital
Balance as of March 31, 2023	927	(327)	10,288	10,888	501	11,389
Net profit for the period	-	-	587	587	21	608
Dividend	-	-	(220)	(220)	-	(220)
Other comprehensive income, after tax effect	-	37	-	37	3	40
Balance as at June 30, 2023	927	(290)	10,655	11,292	525	11,817

For the six months ended June 30, 2024 (unaudited)

Share
capital
and
premium (1)

Accumulated
other
comprehensive
loss

Retained
earnings (2)

Total
share-
holders'
equity

Non-
controlling
interests

Total
capital

Balance as at December 31, 2023 (audited)

927

(155)

11,299

12,071

575

12,646

Net profit for the period

1,178

1,227

Dividend

(497)

(29)

(526)

Other comprehensive loss, after tax effect

(137)

(5)

(142)

Balance as at June 30, 2024

927

(292)

11,980

12,615

590

13,205


		For the six months ended June 30, 2023 (unaudited)
		Share capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)	Total share- holders' equity	Non- controlling interests	Total capital
Balance as at December 31, 2022 (audited)	927	(303)	9,935	10,559	476	11,035
Adjustment of the opening balance, net of tax, due to the effect of initial implementation in investee company*	-	-	(10)	(10)	-	(10)
Adjusted balance at January 1, 2023, following initial implementation	927	(303)	9,925	10,549	476	11,025
Net profit for the period	-	-	1,218	1,218	44	1,262
Dividend	-	-	(488)	(488)	-	(488)
Other comprehensive income, after tax effect	-	13	-	13	5	18
Balance as at June 30, 2023	927	(290)	10,655	11,292	525	11,817

STATEMENT OF CHANGES IN EQUITY (CONT'D)
(NIS million)

		For the year ended December 31, 2023 (audited)
		Share capital and premium(1)		Accumulated other comprehensive income (loss)		Retained earnings(2)	Total	Non- controlling interests	Total capital
Balance as at December 31, 2022	927	(303)	9,935	10,559	476	11,035
Adjustment of the opening balance, net of tax, due to the effect of initial implementation in investee company *	-	-	(10)	(10)	-	(10)
Adjusted balance at January 1, 2023, following initial implementation	927	(303)	9,925	10,549	476	11,025
Net profit for the period	-	-	2,172	2,172	90	2,262
Dividend	-	-	(798)	(798)	-	(798)
Other comprehensive income, after tax effect	-	148	-	148	9	157
Balance as at December 31, 2023	927	(155)	11,299	12,071	575	12,646

*
Cumulative effect of the initial implementation of US accounting principles in the matter of financial instruments - credit losses (ASC-326).

(1)
Including share premium of NIS 313 million (as from 1992 onwards).
(2)
Including an amount of NIS 2,391 million which cannot be distributed as dividend.

Contact:
Dafna Zucker
First International Bank of
Israel
[email protected]
+972-3-519-6224

SOURCE First International Bank of Israel

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