First International Bank of Israel Presents Third Quarter and First Nine Months 2021 Results
TEL AVIV, Israel, Nov. 23, 2021 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the third quarter and first nine months of 2021.
Financial Highlights
- Net profit of NIS 364 million in the third quarter of the year; Return on equity 15.5%;
- Net profit of NIS 1,072 million in the first nine months of the year, representing growth of 99%; Return on equity 15.3%;
- Growth of 8.5% in total income for the first nine months of the year in comparison with the corresponding period last year;
- Growth of 6.8% in credit to the public in the past year:
Residential loans increased by 13.4%, small businesses increased by 8.9%, middle-market businesses increased by 5.4% and credit to households increased by 4.2%;
- The Bank continued to expand its activities in the capital markets and investment consulting: growth of 22.6% in the past year in the customer assets portfolio (deposits and securities);
- Ratio of tier I equity capital to risk components of 11.64%;
- The Board of Directors of the Bank decided on a dividend distribution of NIS 320 million, comprising 30% of the net profit of the first nine months of the year;
Profitability
Record profit for the First International Bank: the net profit in the first nine month of the year amounted to NIS 1,072 million, an increase of 98.5% in comparison with the corresponding period of last year. Return on equity reached 15.3%.
In the third quarter of the year, net profit amounted to NIS 364 million, as compared to NIS 201 million in the corresponding quarter of last year. Return on equity for the third quarter reached 15.5%.
Growth and Efficiency
Total income of the Bank in the first nine months of the year increased by 8.5% compared to the corresponding period of last year. Total financing income in the first nine months of the year increased by 10.9% compared to the corresponding period of last year. Commission income in the first nine months of the year increased by 3% compared to the corresponding period of last year, including commission income from capital market operations, which increased by 6.3%.
Credit to the public in the past year increased by 6.8%, and amounted to NIS 96,965 million. The growth in credit was characterized by the continued diversity of the credit, while maintaining a balanced risk-management policy. The residential loan portfolio grew by 13.4%, small businesses grew by 8.9%, the middle market businesses grew by 5.4% and credit to households grew by 4.2%. Since the beginning of the year, credit to the public grew by 5.1%.
Growth was also evident in the capital markets field and investment consulting field: the customer assets portfolio (deposits and securities), grew by 22.6% in the past year and amounted to NIS 588.3 billion. In the first nine months of the current year, the customer assets portfolio grew by 11%. Deposits from the public increased by 9.1% in the past year and amounted to NIS 148,273 million.
The First International Bank continued to improve efficiencies and the efficiency ratio improved to 57.9% in the first nine months of the year and 57.3% in the third quarter, as compared to 61.8% in 2020. Operating and other expenses in the first nine months of the year increased by NIS 59 million, representing a growth of 3.1% as compared to the corresponding period of last year. This growth was due to increased payroll expenses, mainly based on an adjustment of the variable compensation component which is related to the profitability of the Bank. The Bank introduced an early retirement plan and most of the retirees are expected to retire at the end of the year.
Financial Stability
The upward trend in the capital attributable to the shareholders of the Bank continued, and grew by 9.6% in the first nine months of the year (representing growth of NIS 881 million) and as of September 30, 2021, amounted to NIS 10,022 million. The tier I equity capital ratio increased to 11.64%, compared with the required regulatory ratio of 8.25%, a positive difference of 3.4% (or 2.4% when disregarding the regulatory capital relief), which represents the highest positive difference in the Israeli banking system.
The Board of Directors of the Bank approved a dividend distribution of NIS 320 million, comprising 30% of net profit for the first nine months of the year. This is in addition to the dividend of NIS 225 million, which was distributed in September 2021 in respect of the profit of the Bank for 2020.
The Bank's policy for the distribution of 50% of net profit remains unchanged, and its implementation continues to be examined in accordance with developments and regulation, and subject to guidelines of the Supervisor of Banks in Israel.
Quality of the Credit Portfolio
The ratio of deferred debts to total credit to the public at the end of September 2021 amounted to a negligible ratio of 0.09%, compared to 0.2% at the end of the second quarter, and 1.9% at the end of December 2020. This is an indication of the quality of the credit portfolio and the quality of the Bank's borrowers. The Bank continues to maintain appropriate provision cushions.
Income in respect of credit losses amounted to NIS 206 million in the first nine months of the year, compared to expenses of NIS 413 million in the corresponding period of last year. During 2020, given the high uncertainty caused by the Corona crisis, the Bank increased the credit loss provision by NIS 436 million.
In the first nine months of 2021, the Bank recorded income in respect of credit losses, primarily because of the decline in the collective provision. This was due to an improvement in macro-economic indicators, indicators showing the level of risk inherent in the credit portfolio of the Bank, and the continued decline in the volume of deferred repayment of debts.
Management Comment
Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group stated, "The First International Bank continued its growth trend, while maintaining its high financial stability. The growth in credit is clear – mostly in the Bank's focus areas: within the customer assets portfolio whose growth reflects our leadership in the capital markets, as well as in the volume of capital which for the first time crossed the NIS 10 billion milestone. We continued our consistent trend of improving our efficiency ratio, by advancing work and automation processes, developing digital channels and promoting innovation, as well as via other activities.
"The First International Bank, as a competition-generating bank, welcomes steps that encourages increased competition within our market, and stands at the forefront of the open banking reform, recently introduced by the Bank of Israel. We are the first bank to introduce Multibank - a service for the collection of financial data used by open banking. The Bank also promotes the service of transfer-at-a-click for the movement of bank accounts between different banks, and the transfer of customers within the framework of the service, which will support the continued growth of our Bank."
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES |
||||||
Principal financial ratios |
For the nine months |
For the year |
||||
2021 |
2020 |
2020 |
||||
in % |
||||||
Execution indices |
||||||
Return on equity attributed to shareholders of the Bank(1) |
15.3% |
8.4% |
8.6% |
|||
Return on average assets(1) |
0.84% |
0.48% |
0.49% |
|||
Ratio of equity capital tier 1 |
11.64% |
10.93% |
11.18% |
|||
Leverage ratio |
5.54% |
5.39% |
5.29% |
|||
Liquidity coverage ratio |
133% |
145% |
150% |
|||
Ratio of total income to average assets(1) |
2.6% |
2.8% |
2.7% |
|||
Ratio of interest income, net to average assets (1) |
1.6% |
1.8% |
1.7% |
|||
Ratio of fees to average assets (1) |
0.8% |
0.9% |
0.9% |
|||
Efficiency ratio |
57.9% |
61.0% |
61.8% |
|||
Credit quality indices |
||||||
Ratio of provision for credit losses to credit to the public |
1.12% |
1.35% |
1.38% |
|||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public |
0.84% |
1.10% |
0.86% |
|||
Ratio of provision for credit losses to total impaired credit to the public |
181% |
168% |
221% |
|||
Ratio of net write-offs to average total credit to the public (1) |
(0.02%) |
0.15% |
0.10% |
|||
Ratio of expenses (income) for credit losses to average total credit to the public (1) |
(0.30%) |
0.62% |
0.52% |
|||
Principal data from the statement of income |
For the nine months |
|||||
2021 |
2020 |
|||||
NIS million |
||||||
Net profit attributed to shareholders of the Bank |
1,072 |
540 |
||||
Interest Income, net |
2,090 |
1,980 |
||||
Expenses (income) from credit losses |
(206) |
413 |
||||
Total non-Interest income |
1,281 |
1,126 |
||||
Of which: Fees |
1,057 |
1,026 |
||||
Total operating and other expenses |
1,953 |
1,894 |
||||
Of which: Salaries and related expenses |
1,199 |
1,138 |
||||
Dismissal expenses |
8 |
5 |
||||
Primary net profit per share of NIS 0.05 par value (NIS) |
10.68 |
5.38 |
||||
Principal data from the balance sheet |
30.9.21 |
30.9.20 |
31.12.20 |
|||
NIS million |
||||||
Total assets |
173,758 |
159,370 |
167,778 |
|||
of which: Cash and deposits with banks |
57,083 |
52,366 |
57,802 |
|||
Securities |
14,803 |
12,174 |
13,105 |
|||
Credit to the public, net |
95,877 |
89,585 |
90,970 |
|||
Total liabilities |
163,301 |
150,042 |
158,243 |
|||
of which: Deposits from the public |
148,273 |
135,914 |
141,677 |
|||
Deposits from banks |
5,471 |
1,717 |
2,992 |
|||
Bonds and subordinated capital notes |
2,851 |
4,384 |
4,394 |
|||
Capital attributed to the shareholders of the Bank |
10,022 |
8,944 |
9,141 |
|||
Additional data |
30.9.21 |
30.9.21 |
31.12.20 |
|||
Share price (0.01 NIS) |
11,820 |
7,108 |
8,514 |
|||
Dividend per share (0.01 NIS) |
225 |
125 |
125 |
(1) Annualized.
CONSOLIDATED STATEMENT OF INCOME |
||||||||||
(NIS million) |
||||||||||
For the three months |
For the nine months |
For the year |
||||||||
2021 |
2020 |
2021 |
2020 |
2020 |
||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||
Interest Income |
807 |
731 |
2,392 |
2,160 |
2,878 |
|||||
Interest Expenses |
97 |
69 |
302 |
180 |
241 |
|||||
Interest Income, net |
710 |
662 |
2,090 |
1,980 |
2,637 |
|||||
Expenses (income) from credit losses |
(69) |
91 |
(206) |
413 |
464 |
|||||
Net Interest Income after expenses from credit losses |
779 |
571 |
2,296 |
1,567 |
2,173 |
|||||
Non- Interest Income |
||||||||||
Non-Interest Financing income |
63 |
36 |
214 |
97 |
148 |
|||||
Fees |
346 |
336 |
1,057 |
1,026 |
1,371 |
|||||
Other income |
6 |
- |
10 |
3 |
4 |
|||||
Total non- Interest income |
415 |
372 |
1,281 |
1,126 |
1,523 |
|||||
Operating and other expenses |
||||||||||
Salaries and related expenses |
399 |
386 |
1,199 |
1,138 |
1,532 |
|||||
Maintenance and depreciation of premises and equipment |
84 |
89 |
255 |
261 |
344 |
|||||
Amortizations and impairment of intangible assets |
27 |
24 |
78 |
71 |
96 |
|||||
Other expenses |
135 |
141 |
421 |
424 |
597 |
|||||
Total operating and other expenses |
645 |
640 |
1,953 |
1,894 |
2,569 |
|||||
Profit before taxes |
549 |
303 |
1,624 |
799 |
1,127 |
|||||
Provision for taxes on profit |
193 |
109 |
570 |
254 |
368 |
|||||
Profit after taxes |
356 |
194 |
1,054 |
545 |
759 |
|||||
The bank's share in profit of equity-basis investee, after taxes |
21 |
19 |
57 |
24 |
29 |
|||||
Net profit: |
||||||||||
Before attribution to non–controlling interests |
377 |
213 |
1,111 |
569 |
788 |
|||||
Attributed to non–controlling interests |
(13) |
(12) |
(39) |
(29) |
(38) |
|||||
Attributed to shareholders of the Bank |
364 |
201 |
1,072 |
540 |
750 |
|||||
NIS |
||||||||||
Primary profit per share attributed to the shareholders |
||||||||||
Net profit per share of NIS 0.05 par value |
3.62 |
2.00 |
10.68 |
5.38 |
7.48 |
|||||
STATEMENT OF COMPREHENSIVE INCOME |
||||||||||
(NIS million) |
||||||||||
For the three months |
For the nine months |
For the year |
||||||||
2021 |
2020 |
2021 |
2020 |
2020 |
||||||
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(audited) |
||||||
Net profit before attribution to non–controlling interests |
377 |
213 |
1,111 |
569 |
788 |
|||||
Net profit attributed to non–controlling interests |
(13) |
(12) |
(39) |
(29) |
(38) |
|||||
Net profit attributed to the shareholders of the Bank |
364 |
201 |
1,072 |
540 |
750 |
|||||
Other comprehensive income (loss) before taxes: |
||||||||||
Adjustments of available for sale bonds to fair value, net |
(8) |
60 |
(4) |
(30) |
(4) |
|||||
Adjustments of liabilities in respect of employee benefits(1) |
12 |
(16) |
58 |
(31) |
(74) |
|||||
Other comprehensive income (loss) before taxes |
4 |
44 |
54 |
(61) |
(78) |
|||||
Related tax effect |
- |
(14) |
(18) |
21 |
26 |
|||||
Other comprehensive income (loss) before attribution to non–controlling interests, after taxes |
4 |
30 |
36 |
(40) |
(52) |
|||||
Less other comprehensive income (loss) attributed to non–controlling interests |
1 |
(1) |
2 |
(1) |
- |
|||||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes |
3 |
31 |
34 |
(39) |
(52) |
|||||
Comprehensive income before attribution to non–controlling interests |
381 |
243 |
1,147 |
529 |
736 |
|||||
Comprehensive income attributed to non–controlling interests |
(14) |
(11) |
(41) |
(28) |
(38) |
|||||
Comprehensive income attributed to the shareholders of the Bank |
367 |
232 |
1,106 |
501 |
698 |
|||||
(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.
The notes to the financial statements are an integral part thereof.
CONSOLIDATED BALANCE SHEET |
||||||
(NIS million) |
||||||
September 30, |
December 31, |
|||||
2021 |
2020 |
2020 |
||||
(unaudited) |
(unaudited) |
(audited) |
||||
Assets |
||||||
Cash and deposits with banks |
57,083 |
52,366 |
57,802 |
|||
Securities |
14,803 |
12,174 |
13,105 |
|||
Securities which were borrowed |
232 |
14 |
11 |
|||
Credit to the public |
96,965 |
90,810 |
92,247 |
|||
Provision for Credit losses |
(1,088) |
(1,225) |
(1,277) |
|||
Credit to the public, net |
95,877 |
89,585 |
90,970 |
|||
Credit to the government |
859 |
651 |
656 |
|||
Investment in investee company |
699 |
629 |
636 |
|||
Premises and equipment |
929 |
970 |
965 |
|||
Intangible assets |
275 |
249 |
272 |
|||
Assets in respect of derivative instruments |
1,565 |
1,438 |
1,897 |
|||
Other assets(2) |
1,436 |
1,294 |
1,464 |
|||
Total assets |
173,758 |
159,370 |
167,778 |
|||
Liabilities and Shareholders' Equity |
||||||
Deposits from the public |
148,273 |
135,914 |
141,677 |
|||
Deposits from banks |
5,471 |
1,717 |
2,992 |
|||
Deposits from the Government |
417 |
426 |
459 |
|||
Bonds and subordinated capital notes |
2,851 |
4,384 |
4,394 |
|||
Liabilities in respect of derivative instruments |
1,751 |
1,669 |
2,314 |
|||
Other liabilities(1)(3) |
4,538 |
5,932 |
6,407 |
|||
Total liabilities |
163,301 |
150,042 |
158,243 |
|||
Capital attributed to the shareholders of the Bank |
10,022 |
8,944 |
9,141 |
|||
Non-controlling interests |
435 |
384 |
394 |
|||
Total equity |
10,457 |
9,328 |
9,535 |
|||
Total liabilities and shareholders' equity |
173,758 |
159,370 |
167,778 |
|||
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 86 million and NIS 77 million and NIS 86 million at 30.9.21, 30.9.20 and 31.12.20, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 263 million and NIS 90 million and NIS 247 million at 30.9.21, 30.9.20 and 31.12.20, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 440 million and NIS 100 million and NIS 258 million at 30.9.21, 30.9.20 and 31.12.20, respectively.
The notes to the financial statements are an integral part thereof.
STATEMENT OF CHANGES IN EQUITY |
||||||||||||
(NIS million) |
||||||||||||
For the three months ended September 30, 2021 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as of June 30, 2021 |
927 |
(152) |
*9,105 |
9,880 |
421 |
10,301 |
||||||
Net profit for the period |
- |
- |
364 |
364 |
13 |
377 |
||||||
Dividend |
- |
- |
(225) |
(225) |
- |
(225) |
||||||
Other comprehensive income, after tax effect |
- |
3 |
- |
3 |
1 |
4 |
||||||
Balance as at September 30, 2021 |
927 |
(149) |
9,244 |
10,022 |
435 |
10,457 |
||||||
For the three months ended September 30, 2020 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as of June 30, 2020 |
927 |
(201) |
7,986 |
8,712 |
373 |
9,085 |
||||||
Net profit for the period |
- |
- |
201 |
201 |
12 |
213 |
||||||
Other comprehensive income (loss), after tax effect |
- |
31 |
- |
31 |
(1) |
30 |
||||||
Balance as at September 30, 2020 |
927 |
(170) |
8,187 |
8,944 |
384 |
9,328 |
||||||
For the nine months ended September 30, 2021 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as at December 31, 2020 (audited) |
927 |
(183) |
8,397 |
9,141 |
394 |
9,535 |
||||||
Net profit for the period |
- |
- |
1,072 |
1,072 |
39 |
1,111 |
||||||
Dividend |
- |
- |
(225) |
(225) |
- |
(225) |
||||||
Other comprehensive income, after tax effect |
- |
34 |
- |
34 |
2 |
36 |
||||||
Balance as at September 30, 2021 |
927 |
(149) |
9,244 |
10,022 |
435 |
10,457 |
||||||
For the nine months ended September 30, 2020 (unaudited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as at December 31, 2019 (audited) |
927 |
(131) |
7,772 |
8,568 |
356 |
8,924 |
||||||
Net profit for the period |
- |
- |
540 |
540 |
29 |
569 |
||||||
Dividend |
- |
- |
(125) |
(125) |
- |
(125) |
||||||
Other comprehensive loss, after tax effect |
- |
(39) |
- |
(39) |
(1) |
(40) |
||||||
Balance as at September 30, 2020 |
927 |
(170) |
8,187 |
8,944 |
384 |
9,328 |
||||||
STATEMENT OF CHANGES IN EQUITY (CONT'D) |
||||||||||||
(NIS million) |
||||||||||||
For the year ended December 31, 2020 (audited) |
||||||||||||
Share |
Accumulated |
Retained |
Total |
Non- controlling |
Total |
|||||||
Balance as at December 31, 2019 |
927 |
(131) |
7,772 |
8,568 |
356 |
8,924 |
||||||
Net profit for the year |
- |
- |
750 |
750 |
38 |
788 |
||||||
Dividend |
- |
- |
(125) |
(125) |
- |
(125) |
||||||
Other comprehensive loss, after tax effect |
- |
(52) |
- |
(52) |
- |
(52) |
||||||
Balance as at December 31, 2020 |
927 |
(183) |
8,397 |
9,141 |
394 |
9,535 |
||||||
* 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
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