The financial results of the Bank reflect the continuation of the process we have led at the Bank, a process of which the essence is growth and efficiency. The results of our merger with Otzar Hachayal Bank, which is one of the key moves that we have recently taken has begun to show its effect both with respect to cost savings and to growth across our areas of operations. Additional significant moves we have made at the Bank are the intensification of capital market operations, a continuation of the consistent and continuing growth trends in credit, as well as developments in the digital field. This has enabled us to offer our customers with a personal and professional service, alongside an innovative and advanced digital service. We have implemented improvements to our digital strategy and IT infrastructure to improve our competitiveness, enabling us to provide an efficient service and continuing growth.
Third Quarter 2019 Highlights
- Q3 net earnings of NIS 236 million, growth of 11.3% year-over-year;
- Return on Equity: 11.7%;
First Nine Months of 2019 Highlights
- Net earnings increased by 13.2% to NIS 643 million year-over-year;
- Return on Equity: 10.6%;
- Efficiency ratio improved to 64.9% versus 67.7% last year;
- Growth of 3.6% in credit to the public as from beginning of 2019;
- Ratio of Tier I equity capital to risk assets: 10.79
First International Bank Group's third quarter net earnings amounted to NIS 236 million, an increase of 11.3% over the third quarter of last year representing a return on equity – 11.7%.
In the first nine months of the year, net earnings increased by 13.2% to NIS 643 million, while return on equity reached 10.6%.
Credit to the public, net, increased by 3.6% as of the start of 2019 (i.e. as compared with the end of 2018) and amounted to NIS 87,310 million. The growth in credit is highlighted across all the segments of operation: private customers – 3.9%, small and middle market businesses – 2.1%, and large businesses – 4%.
The ratio of credit loss expenses to average balance of credit to the public, amounted to 0.14%, compared with a ratio of 0.21% in the corresponding period of last year.
Financing profit, net, increased in the first nine months of the year by 4.4% and amounted to NIS 2,117 million. Financing profit from current operations increased by 6.9% and amounted to NIS 2,060 million.
The Bank continues to improve its efficiency: the efficiency ratio improved to 64.9% compared with 67.7% in the corresponding period last year and compared to 68.4% in 2018. Operating and other expenses decreased in the first nine months of the year by 4.4% versus the corresponding period last year, and amounted to NIS 2 billion. The reduction in expenses can be seen across the various expense items: payroll and related benefits – a reduction of 2%, depreciation and maintenance of buildings and equipment – a reduction of 5%. .
Financial Stability and Dividend Distribution
The Tier I equity capital ratio amounted to 10.79%, and the comprehensive capital ratio amounted to 13.71%.
The First International Bank has a dividend distribution policy of up to 50% of net earnings, and accordingly, since the beginning of the year, the Bank has distributed total dividends amounting to NIS 300 million. This represents a dividend yield of 4.6%.
Subsequent to the date of the financial statements, the Board of Directors of the Bank has resolved to distribute a further dividend in the amount of NIS 110 million.