First International Bank of Israel Presents First Quarter 2022 Results

TEL AVIV, Israel, May 24, 2022 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the first quarter of 2022, ended March 31, 2022.

Financial Highlights for the First Quarter of 2022

• Net profit of NIS 322 million- Growth of 5.9% compared to the corresponding quarter last year;
• Return on equity of 13%;
• Growth of 5% in credit to the public and growth of 14.7% in the past year;
• Ratio of tier I equity capital to risk components of 10.79%, 1.54% higher than the required regulatory ratio - the highest gap among the banks in Israel; the excess capital enables growth in credit and  for ongoing business development;
• The Board of Directors approved a dividend distribution amounting to 50% of net income.

Profitability

Net profit of the First International Bank Group in the first quarter of 2022, amounted to NIS 322 million, as compared to NIS 304 million in the corresponding first quarter of 2021, an increase of 5.9%. Return on equity reached 13%.

Growth and Efficiency

The First International Bank continues its consistent trend of growth, which is demonstrated across all core areas of the Bank's operations.

Revenue in the first quarter increased by 5.3%, compared to the first quarter of last year. Net interest income increased by 11% and commission income increased by 6.4%.

Credit to the public increased by 14.7% compared with that of the first quarter of last year, amounting to a total of NIS 107,342 million. In the first quarter of 2022, credit to the public grew by 5%. The growth in credit was across all fields of operation: compared with that of the first quarter of last year, the middle market business segment grew by 22.5%, the small business segment grew by 16.7%, the large business segment grew by 20.5%, credit to households grew by 6%, and the residential loan segment grew by 14.7%.

The customer's assets portfolio (average) increase by NIS 47 billion, representing growth of 8.5% compared with that of the first quarter of last year and amounted to NIS 596 billion.

No credit loss expense was recorded in the first quarter of 2022. This compares to an credit loss income of NIS 9 million, in the first quarter of last year. The total value of problematic credit declined by 22% compared with that of the first quarter of last year and it declined by 12.4% as compared to that of year-end 2021.

The efficiency ratio amounted to 58.5% in the first quarter of 2022. This demonstrates an improvement compared with 59.0% as of the corresponding period last year.

Operating and other expenses in the first quarter of 2022 amounted to NIS 684 million, a growth of 4.3% as compared to first quarter of last year. This growth is due to the rise in payroll expenses due to timing differences in the components payroll which are of a fluctuating nature, among others impacts. Maintenance and depreciation of building and equipment expenses decreased by 4.7% compared with the first quarter of last year, mainly due to the decrease in the overall scope of real estate assets of the Group, due to efficiency measures taken. 

Financial stability

The equity attributed to the shareholders of the Bank grew by 3.7% year-over-year, (representing an absolute growth of NIS 356 million) and amounted to NIS 9,851 million as of March 31, 2022. The Tier I equity capital ratio reached 10.79% with a positive excess of 1.54% over the required regulatory ratio - the highest gap among the banks in Israel. This capital surplus allows for growth in credit and for the continuation of business development activities.

The Bank continued its dividend policy, by which it distributes dividends of up to 50% of net income. Accordingly, the Board of Directors today approved a dividend distribution of NIS 160 million, which comprises 50% of net income for the first quarter of 2022 - the highest among the banks in Israel. This is in addition to dividends of NIS 380 million distributed during the first quarter of the year. The annual divided return as of May 5, 2022, amounted to 7.33%, which is the highest among the banks in Israel.

Innovation

The First International Bank continues to strengthen its connection with its customers, offering unique and competition generating products, such as its Multibank system which shows the customer the details of all their accounts at the different banks, thus encouraging competition. The First International Bank was the first of all banks to introduce a system of this kind.

Additional innovations are: the loyalty program, Beyond, providing for a customer experience in the world of aviation and tourism, the launch of an academic school for capital markets education, which is a professional digital course for the Bank's customers, the Life Plan program which is a holistic digital tool for investment management, and more. The Bank continues to invest in digital and innovation across all fields of its operations, and recently, the innovation and digital group at the Bank was expanded to a full department, which also includes strategy. digital and innovation

Management Comment

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group, stated: "The results for the first quarter of 2022, are due to continued growth in the current core operations of the Bank across the various fields of activity. We achieved all this while maintaining a high level of capital adequacy enabling growth, as well as financial stability and asset quality. The Bank continues to continuously innovate and develop investment and savings products which are tailored to current market conditions and economic trends."

*    Immaterial adjustment of comparative data.
**   Reclassified.
⁽¹⁾     Annualized.
⁽²⁾    The ratio is computed in respect of the three months ended at the end of the reporting period.
⁽³⁾     According to instructions of the Bank of Israel the Net stable funding ratio was calculated since 2021, Therefor no comparative data for the three months ended March 31, 2021 is stated.

*         Immaterial adjustment of comparative data.

*          Immaterial adjustment of comparative data.

⁽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.

*       Immaterial adjustment of comparative data.

⁽¹⁾   Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 134 million and NIS 88 million and NIS 79 million at 31.3.22, 31.3.21 and 31.12.21, respectively.
⁽²⁾   Of which: other assets measured at fair value in the amount of NIS 261 million and NIS 375 million and NIS 333 million at 31.3.22, 31.3.21 and 31.12.21, respectively.
⁽³⁾   Of which: other liabilities measured at fair value in the amount of NIS 435 million and NIS 375 million and NIS 641 million at 31.3.22, 31.3.21 and 31.12.21, respectively.

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

⁽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
E-mail: [email protected]
Tel: +972-3-519-6224

Ehud Helft
GK Investor & Public Relations
E-mail: [email protected]
Tel: +1-646-201-924

SOURCE First International Bank of Israel