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Press Releases

Leumi Reports Third-Quarter 2019 Net Income of NIS 2,780 Million ($798 Million) and 10.4% ROE in the First Nine Months of 2019

The Bank will distribute a 40% dividend totaling NIS 306 million ($88 million);
The accumulated dividend for the first nine months of 2019, including the share buyback, totaled NIS 1.6 billion ($460 million)

26.11.2019

 

> Net income in the first nine months of 2019 reached NIS 2,780 million ($798 million), compared with NIS 2,569 million ($738 million) in the same period last year – a 8.2% year-over-year increase.

 

> Net income in the third quarter of 2019 reached NIS 765 million ($220 million), compared with NIS 936 million ($269 million) in the same period last year – a 18.3% decrease, and compared with NIS 894 million ($257 million) in the same period last year when excluding the effect of Leumi Card – a 14.4% decrease. The lower profitability compared to the same quarter last year mainly stems from a negative CPI in the quarter at a rate of 0.7%, compared to a positive CPI at a rate of 0.2% in the same quarter last year.

 

> Return on equity in the first nine months of 2019 was 10.4%, compared with 10.2% in the same period last year. Excluding the effect of the sale of Leumi Card - the ROE was 9.6%, similar to the same period last year.

 

> Return on equity in the third quarter of 2019 was 8.7%, compared with 11.2% in the same period last year. Excluding the effect of the sale of Leumi Card - the ROE in the third quarter of 2018 was 10.6%.

 

> Efficiency ratio continues to improve – A 55.2% ratio in the first nine months of 2019, compared with 59.5% in the same period last year. Excluding the effect of Leumi Card - the efficiency ratio was 56.9%, compared with 59.6% in the same period last year. The Bank is currently implementing a voluntary retirement plan for 400 employees, which is expected to be completed by the end of the year.

 

> Growth in the loan portfolio - The Bank’s loan portfolio as at September 30, 2019 totaled NIS 279.7 billion ($80.3 billion), a 4.5% increase compared to the same period last year. The commercial portfolio increased by 8.6%, the mortgage portfolio increased by 4.8% and the corporate portfolio increased by 10.9%.

 

> Credit loss expenses in the first nine months of 2019 reached 0.21% of the credit portfolio, compared with 0.12% in the same period last year (excluding Leumi Card). The increase in expenses stems from credit growth, a decrease in collections and reclassifications.

 

> Common Equity Tier 1 capital ratio as at September 30, 2019 was 11.73%, and the total capital ratio reached 15.55%.

 

> Dividend and share buybacks - The Bank will distribute a dividend of 40% of its net income in the third quarter of 2019, totaling NIS 306 million ($88 million). The accumulated dividend for the first nine months of 2019 totaled NIS 1.1 billion ($316 million). In addition, the Bank executed a share buyback plan during the third quarter of 2019, totaling NIS 353 million ($101 million). Since the beginning of the year, the Bank purchased shares totaling NIS 700 million ($201 million).

 

> Net interest income in the first nine months of 2019, excluding the effect of Leumi Card, was up by NIS 287 million ($82 million) compared with the same period last year, a 4.5% increase.

 

> Total operating and other expenses in the first nine months of 2019, excluding the effect of Leumi Card, were up by NIS 173 million ($50 million) compared with the same period last year, a 3.1% increase. The increase mainly stems from a provision for bonuses, including a sign-on bonus in respect of the collective salary agreement, and a one-time expense in respect of the exchange of bond series.

 

An Improvement in Balance Sheet Parameters:

 

> Shareholders' equity totaled NIS 35.1 billion ($10.1 billion) as at September 30, 2019, compared with NIS 34.8 billion ($10.0 billion) as at September 30, 2018.

 

> Net credit to the public totaled NIS 279.7 billion ($80.3 billion) as at September 30, 2019, compared with NIS 267.7 billion ($76.9 billion) as at September 30, 2018 (excluding Leumi Card). The increase is mainly attributed to mortgage, middle-market and corporate loans.

 

> Deposits by the public totaled NIS 358.9 billion ($103.1 billion) as at September 30, 2019, similar to last year.

 

> Leverage ratio as at September 30, 2019 was 7.41%, compared to the 6% minimum required by the Bank of Israel.

 

> Liquidity coverage ratio as at September 30, 2019 was 121%, compared to the 100% minimum required by the Bank of Israel.

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