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Press Releases

Leumi Reports Net Income of NIS 3,522 Million ($1,019 Million) and ROE of 9.8% for 2019

The Bank will distribute a NIS 297 million ($86 million) dividend;
Since the beginning of 2019, dividend and share buyback totaled NIS 2.1 billion ($608 million);

The Bank’s Board of Directors approved an additional share buyback plan for 2020 of up to NIS 700 million ($203 million)

26.02.2020

 

  • Net income in 2019 reached NIS 3,522 million ($1,019 million), compared with NIS 3,257 million ($942 million) in 2018 - a 8.1% year-over-year increase.
     
  • Return on equity in 2019 reached 9.8%, compared with 9.5% in the same period last year. Excluding the effect of Leumi Card, the return on equity in 2019 was 9.2%, compared with 9.0% in the corresponding period last year.
     
  • Common Equity Tier 1 capital ratio as at December 31, 2019 was 11.88%, and the total capital ratio reached 15.67%.
     
  • Efficiency ratio continues to improve – A 56.8% ratio in 2019, compared with 60.6% in 2018. Excluding the effect of Leumi Card - the efficiency ratio was 58.1% in 2019, compared with 60.5% in 2018. During 2019, the Bank implemented an additional efficiency plan, under which 400 employees retired voluntarily from the Bank at the end of the year.

 

  • Dividend and share buyback:
    • The Bank’s Board of Directors approved an additional share buyback plan, to be implemented during 2020, totaling up to NIS 700 million ($203 million).
    • The Bank’s Board of Directors approved a dividend distribution of 40% of the net income in the fourth quarter of 2019, totaling NIS 297 million ($86 million).
    • The accumulated dividend for 2019 totaled NIS 1,409 million ($408 million).  
    • During 2019, Leumi implemented a NIS 700 million ($203 million) share buyback plan.
    • Shareholder returns in 2019 (accumulated dividend + share buyback) totaled NIS 2.1 billion ($608 million).

 

  • Growth in the loan portfolio - The Bank’s loan portfolio as at December 31, 2019, net of the exchange rate effect, increased by 4.8%. Growth in the loan portfolio, including the exchange rate effect, was 3.6%. The commercial portfolio increased by 6.3%; the mortgage portfolio increased by 4.7% and the corporate portfolio increased by 10.6%.
     
  • Credit loss expenses in 2019 reached 0.22% of the loan portfolio, compared with 0.15% in the same period last year (excluding Leumi Card). The increase in expenses stems from credit growth, a decrease in collections and reclassifications.
     
  • Net finance income in 2019, excluding the effect of Leumi Card, was up by 10.2% compared to last year, totaling NIS 10.2 billion ($3.0 billion).
     
  • Operating expenses in 2019, excluding the effect of Leumi Card, were up by NIS 264 million ($76 million) compared with the same period last year, a 3.5% 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.

 

Continued Implementation of the Bank’s Strategy:
 

  • Responsible Growth - In the past years, Leumi has invested significant resources in reducing expenses, improving the capital structure and mitigating risks, while making massive investments in technological infrastructures, which serve as the basis for the future of banking. With the infrastructures in place, the business focus of the Bank will naturally be shifted towards boosting responsible growth.
     
  • Operations Division - The Operations Division has a significant role in improving the efficiency ratio and upgrading customer service by implementing new technologies, including robotics, across all units of the Group.
     
  • Improving the capital structure - Leumi has recently completed a groundbreaking move in the Israeli banking system with the issuance of Tier-2 subordinated notes to foreign investors in the amount of USD 750 million, with demands exceeding USD 4 billion.
     
  • Leumi continues to lead in innovation and digital banking in Israel:
    • PEPPER - Leumi’s mobile-only digital bank - continues to expand its activity, having launched this year its 'Pepper Invest' app, which allows trading in leading US stocks and ETSs, enabling fractional shares trading with a minimal investment of NIS 50.
       
    • PAY payments app extended this year its penetration into the contactless payments world and is expected to continue its cooperation with leading Israeli retailers.  
       
    • Leumi Digital - Extension of the range of services available on direct channels, such as transfers of foreign currency via mobile app, starting an investment portfolio, digital guarantees, pre-authorized debits, etc.
       
  • Leumi continues to lead the financing of Israeli high-tech through LeumiTech, which expanded its activity in 2019 both in the US and the UK.

 

Development of Balance Sheet Items:

 

  • Net credit to the public as at December 31, 2019 totaled NIS 282.5 billion ($81.7 billion), compared with NIS 272.6 billion ($78.9 billion) as at December 31, 2018.
     
  • Deposits by the public as at December 31, 2019 totaled NIS 373.6 billion ($108.1 billion), compared with NIS 364.7 billion ($105.5 billion) as at December 31, 2018.
     
  • Leverage ratio as at December 31, 2019 was 7.34%, compared to the 6% minimum required by the Bank of Israel.
     
  • Liquidity coverage ratio as at December 31, 2019 was 123%, compared to the 100% minimum required by the Bank of Israel.

For the full report >>