Dear Investor

 

The results for the first half of the year reflect the continued trend by which we have seen for quite some time, demonstrating growth in income and reduction in expenses, with a strict maintenance of the high financial stability of the Bank. The improvement in efficiency at the Bank is the outcome of the efficiency measures which we have taken, which are being reflected gradually, mainly following the merger with Otzar Hachayal Bank and the retirement of employees under voluntary retirement plans. Given our growth and efficiency processes, as well as our high and continuous financial stability recently led to both credit rating agencies that rate the Bank, S&P Ma'alot and Midrug, to raise the deposit ratings of the Bank to a level of AAA. 

 

 

• Second quarter net earnings of NIS 224 million, a growth of 2.3% year-over-year and return on equity of 11.3%

 

• First half 2019 net earnings of NIS 407 million, a growth of 14.3% year-over-year and return on equity of 10.2%;

 

• First half 2019 earnings from financing operations increased by 9.8% to NIS 1,412 million;

 

• Annual growth of 4.1% in the average balance of credit extended to the public; 

 

• Ratio of Tier I equity capital to risk assets: 10.86%;

 

• S&P Ma'alot and Moody's Midrug raised the credit rating of the Bank to AAA;

 

 

In the first half of the 2019, net earnings of the First International Bank Group increased by 14.3year-over-year, amounting to NIS 407 million. Return on equity reached 10.2% as compared with 9.3% in the corresponding period last year and for the whole of 2018.

 

In the second quarter of 2019, net earnings amounted to NIS 224 million, an increase of 2.3% year-over-year, and return on equity reached 11.3%. After elimination of certain components in the corresponding quarter last year (a gain of NIS 33 million on the sale of assets and expenses of NIS 7 million in respect of the merger with Otzar Hachayal Bank), net earnings for the quarter increased by 16.1%.

 

 

Financing profit increased in the first half of the year by 9.8% to NIS 1,412 million, and in the second quarter of the year, increased by 10.4% in comparison with the corresponding period last year. Credit to the public, net, increased in comparison with the corresponding period last year by 3.1% (a growth of 4.1% in average balances) amounting to NIS 85,549 million. Credit loss expenses amounted to 0.14% of the amount of credit to the public, in contrast to a rate of 0.20% in the corresponding period last year. 

 

 

The Bank continued to improve its efficiency parameters: the efficiency ratio improved to 65.9% in the first half of the year, as compared with a ratio of 68.8% in the corresponding period last year. Operating and other expenses decreased in the first half of the year by 2.9% as compared with the corresponding period last year, amounting to NIS 1,351 million. 

 

The decrease in expenses can be seen across all the various expense items: payroll and related benefits – a decrease of 1.7%, depreciation and maintenance of buildings and equipment – a decrease of 5.3% and other expenses – a decrease of 5.6%.

 

 

The Tier I equity capital ratio reached 10.86%, and the comprehensive capital ratio reached 13.86%. 

 

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 a dividend of NIS 190 million. The dividend yield reached 4.6%. Subsequent to the date of the financial statements the Board of Directors of the Bank resolved to distribute a further dividend in the amount of NIS 110 million.