CEO Statement
Dear InvestorThe 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.
Financial Highlights
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 includesstrategy. digital and innovation
Smadar Barber-Tsadik
