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First International Bank of Israel Presents Second Quarter 2018 Results

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First International Bank of Israel Presents Second Quarter 2018 Results

PR Newswire

TEL AVIV, Israel, Aug. 15, 2018 /PRNewswire/ --

Highlights of the Second Quarter & First Half of 2018

  • Net profit of NIS 219 million for the quarter, growth of 45% year-over-year;
  • Return on equity for the quarter: 11.7%;
  • Net profit of NIS 356 million for the first half of 2018, growth of 12.3% over the first half of last year;
  • Return on equity for the first half of the year: 9.3%;
  • Growth of 9.5% year-over-year in financing income from current operations for the quarter;
  • The efficiency ratio improved: 68.8% in the first half of 2018, versus 69.2% in the corresponding period last year;
  • The ratio of Tier I equity capital to risk assets amounted to 10.10%;
  • The comprehensive capital ratio amounted to 13.35%;

Management Comment

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group (TASE: FTIN): "The results of the First International Group for the first half of 2018 reflect the ongoing implementation of the Bank's strategy over the past number of quarters. It shows continued growth while focusing on the target markets of the Bank, combined with consistent and gradual implementation of efficiency measures. Our growth was driven by the combination of the Bank's high level of professionalism and service, built on technological and digital progress. Furthermore, the Bank strictly maintains a high level of financial stability by holding extensive capital cushions as well as high quality assets."

Summary of the Results

Profitability

The financial results for the second quarter of 2018 reflected a net profit of NIS 219 million, a growth of 45% as compared with the corresponding quarter last year. Return on equity reached 11.7%.

After elimination of items of a nonrecurring nature, as detailed in the table presented below, net profit recorded growth of 27.8% and return on equity reached 10.2%, in comparison with 8.3% for the corresponding quarter of last year. 

Net profit for the first half of 2018 amounted to NIS 356 million, representing growth of 12.3%.  After elimination of items of a nonrecurring nature, as detailed in the Table presented below, net profit amounted to NIS 362 million, a growth of 25.3% over the corresponding half of last year.

Return on equity in the first half of the year amounted to 9.3%, and with the elimination of the items stated below – amounted to 9.5% in comparison to 8% in the corresponding period last year.

Table: Profitability after elimination of items of a nonrecurring nature


Three months ended

June 30,

Six months ended

June 30,


2018

2017

2018

2017


In NIS millions


Net profit attributed to shareholders of the
Bank – as reported

 

219

 

151

 

356

 

317

With the elimination of:





Gain on sale of the building in Switzerland

-

-

(13)

-

Gain of sale of rights of Otzar Hachayal in the
building serving its Management

(33)

-

(33)

-

Gain on sale of an office building in Tel Aviv

-

-

-

(28)

Provision for an award claim by employees

-

-

29

-

Provision for efficiency measures at a
consolidated subsidiary

 

7

 

-

 

23

 

-

Net profit attributed to shareholders of the
Bank after elimination of the above items

193

151

362

289






Return on equity

10.2%

8.3%

9.5%

8.0

Growth

Financing profit from current operations (net interest income and non-interest financing income) increased in the second quarter of 2018 by 9.5% in comparison with the corresponding quarter last year, and amounted to NIS 647 million, as a result of the growth in volume of operations.

Credit to the public as of June 30, 2018 was NIS 82,951 million, 4.8% higher than that of the corresponding date last year, 3.2% higher than that of December 31, 2017 and 1.3% higher than that of March 31, 2018.

The growth in credit was marked by the continuing spread of credit, and growth was mainly noted in the following credit segments (in relation to that of June 30, 2017):

  • Households and private banking         9.7%    (4.5% in the first half of the year)
  • Middle market businesses                10.5%    (3.6% in the first half of the year)
  • Small businesses                              8.2%    (7.1% in the first half of the year)

Customer asset portfolio (deposits and securities) as of June 30, 2018, amounted to NIS 440 billion, 13% higher than that of the corresponding date last year.

Efficiency and Stability

The efficiency ratio improved to 68.8% in the first half of 2018, compared with 69.5% in the corresponding period in 2017.

Equity attributed to the shareholders of the Bank, continued its upward trend, reaching NIS 7,961 million as of June 30, 2018, 5.3% higher than that of June 30, 2017. 

The ratio of Tier I equity capital reached 10.10%, and the ratio of comprehensive capital reached 13.35%.

The Board of Directors of the Bank resolved on a dividend distribution of NIS 100 million.

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES








Principal financial ratios


For the six months
ended


For the
year
ended



2018


2017


2017







in %

Execution indices







Return on equity (1)

9.3%

8.7%

9.1%

Return on assets (1)

0.5%

0.5%

0.5%

Ratio of equity capital tier 1

10.10%

10.25%

10.38%

Leverage ratio

5.61%

5.63%

5.50%

Liquidity coverage ratio

118%

125%

123%

Efficiency ratio

68.8%

69.2%

69.5%

Efficiency ratio excluding certain components (see below)

67.0%

70.8%

70.0%





Credit quality indices




Ratio of provision for credit losses to credit to the public

1.03%

1.06%

1.03%

Ratio of impaired debts or in arrears of 90 days or more to credit to the public

0.93%

1.20%

0.95%

Ratio of provision for credit losses to total impaired credit to the public

165%

112%

155%

Ratio of net write-offs to average total credit to the public (1)

0.11%

0.23%

0.18%

Ratio of expenses for credit losses to average total credit to the public (1)

0.20%

0.22%

0.15%

 






Principal data from the statement of income


For the six months
ended



2018


2017





NIS million

Net profit attributed to shareholders of the Bank


356


317

Interest Income, net

1,199

1,145

Expenses from credit losses

81

87

Total non-Interest income

825

739

  Of which: Fees

663

651

Total operating and other expenses

*1,392

1,304

  Of which: Salaries and related expenses

*835

797

Primary net profit per share of NIS 0.05 par value (NIS)

3.55

3.16

*     Including provision in respect of claims by the Bank employees for an award, following the implications of a court verdict
regarding the claim by the representative committee of managers.

 








Principal data from the balance sheet






As of



30.6.18


30.6.17


31.12.17







NIS million

Total assets


134,254


128,836


135,717

of which: Cash and deposits with banks

33,090

30,969

39,186

         Securities

11,919

13,047

10,238

         Credit to the public, net

82,951

79,119

80,378

Total liabilities

125,989

120,661

127,333

of which: Deposits from banks

460

746

1,133

         Deposits from the public

112,555

107,280

113,511

         Bonds and subordinated capital notes

5,012

5,070

5,249

Capital attributed to the shareholders of the Bank                                           

7,961

7,563


7,756

 








Additional data




As of



30.6.18


30.6.17


31.12.17

Share price (0.01 NIS)


7,635


6,326


7,202

Dividend per share (NIS)

155

140

310

Ratio of fees to assets (in %)(1)                                                              

1.0%

1.0%

1.0%

           (1)     Annualized.

 

CONSOLIDATED STATEMENT OF INCOME

(NIS million)


















For the three months
ended June 30


For the six months
ended June 30


For the year
Ended
December 31



NOTE


2018


2017


2018


2017


2017



(unaudited)

(unaudited)

(unaudited)

(unaudited)


(audited)

Interest Income


2


819


753


1,473


1,393

2,704

Interest Expenses

2

204

170

274

248

402

Interest Income, net


615

583

1,199

1,145

2,302

Expenses from credit losses

6,12

54

53

81

87

121

Net Interest Income after expenses from credit losses


561

530

1,118

1,058

2,181

Non- Interest Income







Non Interest Financing income

3

47

21

87

33

83

Fees


325

317

663

651

1,305

Other income


52

13

75

55

62

Total non- Interest income


424

351

825

739

1,450

Operating and other expenses







Salaries and related expenses


389

*394

835

*797

*1,579

Maintenance and depreciation of premises and equipment


94

94

190

193

380

Amortizations and impairment of intangible assets


22

22

45

45

94

Other expenses


150

*140

322

*269

*554

Total operating and other expenses


655

650

1,392

1,304

2,607

Profit before taxes


330

231

551

493

1,024

Provision for taxes on profit


117

86

199

183

358

Profit after taxes


213

145

352

310

666

The bank's share in profit of equity-basis investee, after taxes


13

16

19

26

54

Net profit:







Before attribution to noncontrolling interests


226

161

371

336

720

Attributed to noncontrolling interests


(7)

(10)

(15)

(19)

(42)

Attributed to shareholders of the Bank


219

151

356

317

678












NIS

Primary profit per share attributed to the
shareholders
of the Bank













Net profit per share of NIS 0.05 par value


2.18

1.51

3.55

3.16

6.76


          (2)     *             Restated in view of the application of amendment No. 2017-07 of the Codification, regarding improvement of the 
                    presentation of pension and other post-retirement benefits. See also Note 1D.3 below.

(3)

          (4)    The notes to the financial statements are an integral part thereof.


 

STATEMENT OF COMPREHENSIVE INCOME(1)
(NIS million)














For the three
months
ended June 30


For the six months
ended June 30


For the year Ended
December 31



2018


2017


2018


2017


2017



(unaudited)


(unaudited)


(unaudited)


(unaudited)


(audited)

Net profit before attribution to noncontrolling interests


226


161


371


336


720

Net profit attributed to noncontrolling interests

(7)

(10)

(15)

(19)

(42)

Net profit attributed to the shareholders of the Bank

219

151

356

317

678

Other comprehensive income (loss) before taxes:






Adjustments of available for sale securities to fair value, net

(28)

33

(70)

65

90

Adjustments from translation of financial statements(1) net after the effect of hedges(2)

-

-

-

-

4

Adjustments of liabilities in respect of employee benefits(3)

71

10

78

34

1

Other comprehensive income before taxes

43

43

8

99

95

Related tax effect

(14)

(16)

(3)

(35)

(35)

Other comprehensive income before attribution to noncontrolling interests, after taxes

29

27

5

64

60

Less other comprehensive income (loss) attributed to noncontrolling interests

(1)

1

(1)

3

3

Other comprehensive income attributed to the shareholders of the Bank, after taxes

30

26

6

61

57

Comprehensive income before attribution to noncontrolling interests

255

188

376

400

780

Comprehensive income attributed to noncontrolling interests

(6)

(11)

(14)

(22)

(45)

Comprehensive income attributed to the shareholders of the Bank

249

177

362

378

735


                  See note 4.

                  Adjustments from translation of financial statements of foreign operations which their currency of operations is different from
            the currency of operation of the Bank.

                  Hedges-gains (losses) regarding the hedging of investment in foreign currency.

                  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 profit.


                  The notes to the financial statements are an integral part thereof.

 

CONSOLIDATED BALANCE SHEET
(NIS million)
















June 30,


December
31,





2018


2017


2017


NOTE

(unaudited)

(unaudited)

(audited)

Assets





Cash and deposits with banks


33,090

30,969

39,186

Securities

5

11,919

13,047

10,238

Securities which were borrowed


550

903

813

Credit to the public

6

83,811

79,964

81,216

Provision for Credit losses

6

(860)

(845)

(838)

Credit to the public, net


82,951

79,119

80,378

Credit to the government


681

646

675

Investments in investee company


585

535

565

Premises and equipment


1,031

1,105

1,095

Intangible assets


227

232

235

Assets in respect of derivative instruments

10

1,263

1,295

1,342

Other assets(2)


1,950

968

1,186

Assets held for sale


7

17

4

Total assets


134,254

128,836

135,717

Liabilities, temporary equity and Shareholders' Equity





Deposits from the public

7

112,555

107,280

113,511

Deposits from banks


460

746

1,133

Deposits from the Government


613

1,038

960

Bonds and subordinated capital notes


5,012

5,070

5,249

Liabilities in respect of derivative instruments

10

1,124

1,341

1,318

Other liabilities(1)(3)


6,225

5,170

5,162

Liabilities held for sale


-

16

-

Total liabilities


125,989

120,661

127,333

Temporary equity – non-controlling interests


-

336

338

Capital attributed to the shareholders of the Bank


7,961

7,563

7,756

Noncontrolling interests


304

276

290

Total equity


8,265

7,839

8,046

Total liabilities, temporary equity and shareholders' equity


134,254

128,836

135,717

(5)

(6)     (1)           Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 74 million
          and NIS 69 million and NIS 61 million at 30.6.18, 30.6.17 and 31.12.17, respectively.

(7)     (2)           Of which: other assets measured at fair value in the amount of NIS 1,289 million and NIS 341 million and NIS 423
          million at 30.6.18, 30.6.17 and 31.12.17, respectively.

(8)     (3)           Of which: other liabilities measured at fair value in the amount of NIS 1,485 million and NIS 577 million and NIS 521
         million at 30.6.18, 30.6.17 and 31.12.17, respectively.

(9)

(10)  The notes to the financial statements are an integral part thereof.

     

Contacts:

Company

Dafna Zucker

Spokeswoman and IR Officer FIBI

Tel: +972-3-5196219

Email: zucker.d@fibi.co.il

 

Investor Relations

Ehud Helft/Gavriel Frohwein

Investor Relations

Tel: +1-646-688-3559

firstinternationalbank@gkir.com

 

Cision View original content:http://www.prnewswire.com/news-releases/first-international-bank-of-israel-presents-second-quarter-2018-results-300697434.html

SOURCE FIBI-First International Bank of Israel Ltd.

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