Press Release
Leumi Mortgage Bank: Earnings of NIS 29 Million
Q3 /09 Net Earnings of NIS 29 million for the Leumi Mortgage Bank
During the first nine months of 2009 net earnings were NIS 93 million
The Leumi Mortgage Bank Board of Directors has approved the financial statements for the first nine months of 2009, which indicate that the bank's net earnings for the period were NIS 93 million, a decrease of 12.3%, compared with NIS 106 million during the corresponding previous period. Q3/09 net earnings were NIS 29 million, a reduction of 37.8%, compared with NIS 47 million during the corresponding 2008 quarter.
As at 30.9.09, public credit, which represents the bank's primary operation, amounted to NIS 42,381 million, compared with NIS 39783 million at the end of 2008, an increase of 6.5%.
Notwithstanding the increase in public credit, there was a noticeable net interest earnings decline, resulting from low non-indexed and indexed interest rates prevailing in the economy.
The major decline in Q3/09 earnings derived from a decline in interest earnings because of the low interest rates prevailing in the markets. This decline was partially set off by a substantial decrease in the provision for doubtful debts.
During the first nine months of 2009, the annualized net return on capital was 5.61%, compared with 6.90% during the corresponding previous period.
Additional data in the Leumi Mortgage Bank financial statements summing up the first nine months of 2009:
- Net interest earnings prior to the provision for doubtful debts declined by 35.4%, to NIS 227 million, compared with NIS 352 million during the corresponding 2008 period. As aforementioned, the decline is explained by the low interest rate environment prevailing in the economy.
- The provision for doubtful debts during the first nine months of the year were zero, compared with NIS 94 million during the corresponding 2008 period. The reduction in the doubtful debts is explained by the one-time provisions for doubtful debts executed in 2008 and the improvement in borrower repayment ethics.
- Net interest earnings after the provision for doubtful debts amounted to NIS 227 million during the first nine months of 2009, a decline of 11.9%, compared with NIS 258 million during the 2008 period.
- Similarly to the 2008 period, other operating revenue during the first nine months of 2009 amounted to NIS 92 million.
- Operating and other expenditure during the first nine months of 2009 were NIS 167 million, a reduction of 6.5%, compared with 179 million. This reduction derives primarily from a reduction in salary expenses, as a result of a rise in the value of the severance pay funds and the employees' emoluments.
- Pre-tax earnings from banking operations during the period amounted to NIS 152 million, a reduction of 11.1%, compared with NIS 171 million in the 2008 period.
- As at 30.9.2009, the capital adequacy ratio was 9.84%, compared with 9.4% at the end of 2008.
- During the first nine months of 2009, the bank extended NIS 6.1 billion in new loans from the bank's funds (without contractors), an increase of 0.8%, compared with approx. NIS 6 billion during the 2008.
- As at 30.9.09, the bank's balance sheet amounted to approx. NIS 42.7 billion, an increase of 6.5%, compared with approx. NIS 40 million at the end of 2008.
- The bank's equity capital as at the 30.9.09 was approx. NIS 2.4 billion an increase of 13.6%, compared with NIS 2.2 billion at the end of 2008. This capital increase derives from regular earnings of NIS 93 million and capital issues to the parent company worth NIS 200 million.
