|
First International Bank of Israel Presents Third Quarter 2018 Results
TEL AVIV, Israel, Nov. 21, 2018 /PRNewswire/ -- First International Bank of Israel (TASE: FTIN) one of Israel's major banking groups, today announced its results for the third quarter and first nine month period, ending September 30, 2018.
Financial Highlights
- Net earnings of NIS 212 million in the third quarter of 2018, a year over year increase of 4.4%;
- Return on equity for the quarter of 11.1%, excluding certain non recuring items (see tables below)- 9.2%;
- Net earnings of NIS 568 million in the first nine months of the year, an incresae of 9.2%;
- Return on equity of 9.8% in the first nine month of the year
- 12.2% year-over-year growth in interest income from ongoing operation in the third quarter;
- 3.1% growth in credit to the public in the third quarter of the year, and 6.5% grwoth compared with the same period last year;
- Efficiency ratio improved to 67.7% compared with 69.1% in the same period last year;
- Ratio of Tier I equity capital to risk weighted assets: 10.39%;
- The comprehensive capital ratio amounted to 13.80%;
Management Comment
Ms. Smadar Berber-Tsadik CEO of the First International Bank Group stated: "The results of the Bank for the quarter reflect the continuation of a trend we have seen over a long period: the trend of growth in activities and in income, while maintaining the financial stability of the Bank. In the quarter, the Board of Directors decided to fully integrate Otzar Hachayal Bank, while maintaining its strong and long-standing brand, with all its values and content, and maintaining its network of branches. The Bank also successfully carried out a voluntary retirement program. The cost of these initiatives, which we recognized in the current quarter, is in effect investment for the future, of which its benefits will be enjoyed in the future."
Summary of the Results
Profitability
Net earnings of the First International Bank Group in the first nine months of the year amounted to NIS 568 million, a growth of 9.2% in comparison with the corresponding period last year. Return on equity reached 9.8% in the period.
With the elimination of certain items (refer to the table below), net earnings in the nine-month period would have totaled NIS 510 million, showing growth of 10.9% with return on equity of 8.8%.
In the third quarter, net earnings totaled NIS 212 million, a growth of 4.4% in comparison with the corresponding quarter last year. Return on equity for the quarter reached 11.1%. With the elimination of certain items (refer to the table below), net earnings in the period would have totaled NIS 178 million, showing growth of 4.1% with return on equity of 9.2%.
Profitability with the elimination of certain items (in NIS millions)
| Three months ended September 30,
| Nine months ended September 30,
|
| 2018
| 2017
| 2018
| 2017
| Net earnings attributed to the shareholders of the Bank, as reported
| 212
| 203
| 568
| 520
| Eliminated items:
|
|
|
|
| Gain on sale of buildings of subsidiaries
| -
| -
| (46)
| -
| Gain on sale of the Stock Exchange shares
| (65)
| -
| (65)
| -
| Gain on sale of an office building in Tel Aviv-
| -
| -
| -
| (28)
| Provision for merger expenses of Otzar Hachayal
| 31
| -
| 53
| -
| Tax income of prior years
| -
| (32)
| -
| (32)
| Net earnings attributed to the shareholders of the Bank after elimination of above items
| 178
| 171
| 510
| 460
| Return on equity
| 9.2%
| 9.3%
| 8.8%
| 8.3%
|
Growth
Financing income from current operations (net interest income and non-interest financing income) in the third quarter of the year, increased by 12.2% year-over-year, and reached NIS 662 million. The growth was primarily due to the growth in the volume of operations.
Credit to the public as of September 30, 2018 totaled NIS 85,484 million, a growth of 6.5% in relation to September 30, 2017.
The growth in credit is marked by the continuing distribution in credit and is mainly noted in growth in the following credit segments:
- Households and private banking - 7.4%
- Small and middle market businesses - 5.1%
- Large businesses - 2.8%
In the third quarter (compared with that of June 30, 2018) credit to the public grew by 3.1%.
Customer asset portfolio (average balances of deposits and securities) amounted to NIS 445 billion as of September 30, 2018 an increase of 12% in relation to that of September 30, 2017.
Efficiency and Financial Stability
The efficiency ratio improved reaching 67.7% in the first nine months of the year, compared with 69.1% in the corresponding period last year. In the third quarter of the year, the efficiency ratio was 66%.
In the first nine months of the year, the Bank provided the full provision- in the amount of NIS 82 million, in respect of merger expenses with Otzar Hachayal Bank (of which NIS 48 million were provided for in the third quarter). An additional amount of NIS 82 million was provided in respect of awards to employees, mainly in connection with early retirement plans. This expenditure is expected to contribute to the efficiency of the Bank in the future.
The increasing trend related to the capital attributed to the shareholders of the Bank continues, and amounted to NIS 8,096 million, growing by 4.4% in comparison to that at the end of 2017.
The ratio of the Tier I equity capital reached 10.39% and the comprehensive capital ratio reached 13.80%
Dividend Distribution to Shareholders
The Board of Directors of the Bank decided on a dividend distribution of NIS 100 million.
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES
|
|
| Principal financial ratios
|
| For the nine months ended September 30
|
| For the year ended December 31
|
|
| 2018
|
| 2017
|
| 2017
|
|
|
|
|
|
| in %
| Execution indices
|
|
|
|
|
|
| Return on equity (1)
| 9.8%
| 9.4%
| 9.1%
| Return on assets (1)
| 0.6%
| 0.5%
| 0.5%
| Ratio of equity capital tier 1
| 10.39%
| 10.32%
| 10.38%
| Leverage ratio
| 5.63%
| 5.69%
| 5.50%
| Liquidity coverage ratio
| 123%
| 122%
| 123%
| Efficiency ratio
| 67.7%
| 69.1%
| 69.5%
| Efficiency ratio excluding certain components
| 68.2%
| 70.1%
| 70.0%
|
|
|
|
| Credit quality indices
|
|
|
| Ratio of provision for credit losses to credit to the public
| 1.02%
| 1.05%
| 1.03%
| Ratio of impaired debts or in arrears of 90 days or more to credit to the public
| 0.85%
| 0.95%
| 0.92%
| Ratio of provision for credit losses to total impaired credit to the public
| 177%
| 150%
| 155%
| Ratio of net write-offs to average total credit to the public (1)
| 0.12%
| 0.16%
| 0.18%
| Ratio of expenses for credit losses to average total credit to the public (1)
| 0.21%
| 0.16%
| 0.15%
|
|
|
|
|
| Principal data from the statement of income
|
| For the nine months ended September 30,
|
|
| 2018
|
| 2017
|
|
|
|
| NIS million
| Net profit attributed to shareholders of the Bank
|
| 568
|
| 520
| Interest Income, net
| 1,833
| 1,710
| Expenses from credit losses
| 130
| 96
| Total non-Interest income
| 1,257
| 1,104
| Of which: Fees
| 985
| 972
| Total operating and other expenses
| 2,093
| 1,944
| Of which: Salaries and related expenses
| 1,241
| 1,184
| Primary net profit per share of NIS 0.05 par value (NIS)
| 5.66
| 5.18
|
|
|
|
|
|
|
| Principal data from the balance sheet
|
|
|
|
|
| As of
|
|
| 30.9.18
|
| 30.9.17
|
| 31.12.17
|
|
|
|
|
|
| NIS million
| Total assets
|
| 135,851
|
| 129,888
|
| 135,717
| of which: Cash and deposits with banks
| 32,835
| 33,205
| 39,186
| Securities
| 11,880
| 10,590
| 10,238
| Credit to the public, net
| 85,484
| 80,236
| 80,378
| Total liabilities
| 127,441
| 121,563
| 127,333
| of which: Deposits from banks
| 857
| 782
| 1,133
| Deposits from the public
| 113,804
| 108,394
| 113,511
| Bonds and subordinated capital notes
| 5,155
| 5,230
| 5,249
| Capital attributed to the shareholders of the Bank
| 8,096
| 7,706
|
| 7,756
|
|
|
|
|
|
|
| Additional data
|
|
|
| As of
|
|
| 30.9.18
|
| 30.9.17
|
| 31.12.17
| Share price (0.01 NIS)
|
| 8,209
|
| 6,599
|
| 7,202
| Dividend per share (NIS)
| 255
| 210
| 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 September 30
|
| For the nine months
ended September 30
|
| For the year Ended
December 31
|
|
| NOTE
|
| 2018
|
| 2017
|
| 2018
|
| 2017
|
| 2017
|
|
| (unaudited)
| (unaudited)
| (unaudited)
| (unaudited)
|
| (audited)
| Interest Income
|
| 2
|
| 756
|
| 615
|
| 2,229
|
| 2,008
| 2,704
| Interest Expenses
| 2
| 122
| 50
| 396
| 298
| 402
| Interest Income, net
|
| 634
| 565
| 1,833
| 1,710
| 2,302
| Expenses from credit losses
| 6,12
| 49
| 9
| 130
| 96
| 121
| Net Interest Income after expenses from credit losses
|
| 585
| 556
| 1,703
| 1,614
| 2,181
| Non- Interest Income
|
|
|
|
|
|
| Non-Interest Financing income
| 3
| 108
| 38
| 195
| 71
| 83
| Fees
|
| 322
| 321
| 985
| 972
| 1,305
| Other income
|
| 2
| 6
| 77
| 61
| 62
| Total non- Interest income
|
| 432
| 365
| 1,257
| 1,104
| 1,450
| Operating and other expenses
|
|
|
|
|
|
| Salaries and related expenses
|
| 406
| *387
| 1,241
| *1,184
| *1,579
| Maintenance and depreciation of premises and equipment
|
| 95
| 94
| 285
| 287
| 380
| Amortizations and impairment of intangible assets
|
| 22
| 24
| 67
| 69
| 94
| Other expenses
|
| 178
| *135
| 500
| *404
| *554
| Total operating and other expenses
|
| 701
| 640
| 2,093
| 1,944
| 2,607
| Profit before taxes
|
| 316
| 281
| 867
| 774
| 1,024
| Provision for taxes on profit
|
| 103
| 78
| 302
| 261
| 358
| Profit after taxes
|
| 213
| 203
| 565
| 513
| 666
| The bank's share in profit of equity-basis investee, after taxes
|
| 9
| 12
| 28
| 38
| 54
| Net profit:
|
|
|
|
|
|
| Before attribution to non-controlling interests
|
| 222
| 215
| 593
| 551
| 720
| Attributed to non-controlling interests
|
| (10)
| (12)
| (25)
| (31)
| (42)
| Attributed to shareholders of the Bank
|
| 212
| 203
| 568
| 520
| 678
|
|
|
|
|
|
|
|
|
|
|
| NIS
| Primary profit per share attributed to the shareholders
of the Bank
|
|
|
|
|
|
|
|
|
|
|
|
| Net profit per share of NIS 0.05 par value
|
| 2.11
| 2.01
| 5.66
| 5.18
| 6.76
| * 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.
| The notes to the financial statements are an integral part thereof.
|
STATEMENT OF COMPREHENSIVE INCOME(1)
(NIS million)
|
|
|
| For the three months
ended September 30
|
| For the nine months
ended September 30
|
| For the year Ended
December 31
|
|
| 2018
|
| 2017
|
| 2018
|
| 2017
|
| 2017
|
|
| (unaudited)
|
| (unaudited)
|
| (unaudited)
|
| (unaudited)
|
| (audited)
| Net profit before attribution to non-controlling interests
|
| 222
|
| 215
|
| 593
|
| 551
|
| 720
| Net profit attributed to non-controlling interests
| (10)
| (12)
| (25)
| (31)
| (42)
| Net profit attributed to the shareholders of the Bank
| 212
| 203
| 568
| 520
| 678
| Other comprehensive income before taxes:
|
|
|
|
|
| Adjustments of available for sale securities to fair value, net
| 22
| 18
| (48)
| 83
| 90
| Adjustments from translation of financial statements(2) net after the effect of hedges(3)
| -
| -
| -
| -
| 4
| Adjustments of liabilities in respect of employee benefits(4)
| 13
| (9)
| 91
| 25
| 1
| Other comprehensive income before taxes
| 35
| 9
| 43
| 108
| 95
| Related tax effect
| (12)
| (3)
| (15)
| (38)
| (35)
| Other comprehensive income before attribution to non-controlling interests, after taxes
| 23
| 6
| 28
| 70
| 60
| Less other comprehensive income (loss) attributed to non-controlling interests
| -
| -
| (1)
| 3
| 3
| Other comprehensive income attributed to the shareholders of the Bank, after taxes
| 23
| 6
| 29
| 67
| 57
| Comprehensive income before attribution to non-controlling interests
| 245
| 221
| 621
| 621
| 780
| Comprehensive income attributed to non-controlling interests
| (10)
| (12)
| (24)
| (34)
| (45)
| Comprehensive income attributed to the shareholders of the Bank
| 235
| 209
| 597
| 587
| 735
| (1) See note 4.
| (2) Adjustments from translation of financial statements of foreign operations which their currency of operations is different from the currency of operation of the Bank.
| (3) Hedges-gains (losses) regarding the hedging of investment in foreign currency.
| (4) 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)
|
|
|
|
|
|
|
|
| September 30,
|
| December 31,
|
|
|
|
|
|
|
|
| 2018
|
| 2017
|
| 2017
|
|
|
|
|
| NOTE
| (unaudited)
| (unaudited)
| (audited)
| Assets
|
|
|
|
|
|
|
|
| Cash and deposits with banks
|
|
|
|
|
| 32,835
| 33,205
| 39,186
| Securities
|
|
|
|
| 5
| 11,880
| 10,590
| 10,238
| Securities which were borrowed
|
|
|
|
|
| 904
| 895
| 813
| Credit to the public
|
|
|
|
| 6,12
| 86,367
| 81,091
| 81,216
| Provision for Credit losses
|
|
|
|
| 6,12
| (883)
| (855)
| (838)
| Credit to the public, net
|
|
|
|
|
| 85,484
| 80,236
| 80,378
| Credit to the government
|
|
|
|
|
| 672
| 652
| 675
| Investments in investee company
|
|
|
|
|
| 596
| 549
| 565
| Premises and equipment
|
|
|
|
|
| 1,025
| 1,097
| 1,095
| Intangible assets
|
|
|
|
|
| 223
| 226
| 235
| Assets in respect of derivative instruments
|
|
|
|
| 10
| 1,009
| 1,203
| 1,342
| Other assets(2)
|
|
|
|
|
| 1,223
| 1,235
| 1,186
| Assets held for sale
|
|
|
|
|
| -
| -
| 4
| Total assets
|
|
|
|
|
| 135,851
| 129,888
| 135,717
| Liabilities, temporary equity and Shareholders' Equity
|
|
|
|
|
|
|
|
| Deposits from the public
|
|
|
|
| 7
| 113,804
| 108,394
| 113,511
| Deposits from banks
|
|
|
|
|
| 857
| 782
| 1,133
| Deposits from the Government
|
|
|
|
|
| 948
| 846
| 960
| Bonds and subordinated capital notes
|
|
|
|
|
| 5,155
| 5,230
| 5,249
| Liabilities in respect of derivative instruments
|
|
|
|
| 10
| 942
| 1,160
| 1,318
| Other liabilities(1)(3)
|
|
|
|
|
| 5,735
| 5,151
| 5,162
| Total liabilities
|
|
|
|
|
| 127,441
| 121,563
| 127,333
| Temporary equity – non-controlling interests
|
|
|
|
|
| -
| 336
| 338
| Capital attributed to the shareholders of the Bank
|
|
|
|
|
| 8,096
| 7,706
| 7,756
| Non-controlling interests
|
|
|
|
|
| 314
| 283
| 290
| Total equity
|
|
|
|
|
| 8,410
| 7,989
| 8,046
| Total liabilities, temporary equity and shareholders' equity
|
|
|
|
|
| 135,851
| 129,888
| 135,717
| (1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 68 million and NIS 64 million and NIS 61 million at 30.9.18, 30.9.17 and 31.12.17, respectively.
| (2) Of which: other assets measured at fair value in the amount of NIS 392 million and NIS 319 million and NIS 423 million at 30.9.18, 30.9.17 and 31.12.17, respectively.
| (3) Of which: other liabilities measured at fair value in the amount of NIS 720 million and NIS 607 million and NIS 521 million at 30.9.18, 30.9.17 and 31.12.17, 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, 2018 (unaudited)
|
|
| Share capital and premium (1)
|
| Accumulated other comprehensive income (loss)
|
| Retained earnings (2)
|
| Total share-holders' equity
|
| Non- controlling interests
|
| Total equity
| Balance as of June 30, 2018
| 927
| (114)
| 7,148
| 7,961
| 304
| 8,265
| Net profit for the period
| -
| -
| 212
| 212
| 10
| 222
| Dividend
| -
| -
| (100)
| (100)
| -
| (100)
| Other comprehensive income, after tax effect
| -
| 23
| -
| 23
| -
| 23
| Balance as at September 30, 2018
| 927
| (91)
| 7,260
| 8,096
| 314
| 8,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months ended September 30, 2017 (unaudited)
|
|
| Share capital and premium (1)
|
| Accumulated other comprehensive income (loss)
|
| Retained earnings (2)
|
| Total share-holders' equity
|
| Non- controlling interests
|
| Total equity
| Balance as of June 30, 2017
| 927
| (116)
| 6,752
| 7,563
| 276
| 7,839
| Net profit for the period
| -
| -
| 203
| 203
| 7
| 210
| Dividend
| -
| -
| (70)
| (70)
| -
| (70)
| Other comprehensive income, after tax effect
| -
| 6
| -
| 6
| -
| 6
| Temporary equity – non-controlling interests
| -
| -
| 4
| 4
| -
| 4
| Balance as at September 30, 2017
| 927
| (110)
| 6,889
| 7,706
| 283
| 7,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the nine months ended September 30, 2018 (unaudited)
|
|
| Share capital and premium (1)
|
| Accumulated other comprehensive income (loss)
|
| Retained earnings (2)
|
| Total share-holders' equity
|
| Non- controlling interests
|
| Total equity
| Balance at the beginning of the year (audited)
| 927
| (120)
| 6,949
| 7,756
| 290
| 8,046
| Net profit for the period
| -
| -
| 568
| 568
| 25
| 593
| Dividend
| -
| -
| (255)
| (255)
| -
| (255)
| Other comprehensive income (loss), after tax effect
| -
| 29
| -
| 29
| (1)
| 28
| Temporary equity – non-controlling interests
| -
| -
| (2)
| (2)
| -
| (2)
| Balance as at September 30, 2018
| 927
| (91)
| 7,260
| 8,096
| 314
| 8,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the nine months ended September 30, 2017 (unaudited)
|
|
| Share capital and premium (1)
|
| Accumulated other comprehensive income (loss)
|
| Retained earnings (2)
|
| Total share-holders' equity
|
| Non- controlling interests
|
| Total equity
| Balance at the beginning of the year (audited)
| 927
| (177)
| 6,571
| 7,321
| 283
| 7,604
| Net profit for the period
| -
| -
| 520
| 520
| 19
| 539
| Dividend
| -
| -
| (210)
| (210)
| (20)
| (230)
| Other comprehensive income, after tax effect
| -
| 67
| -
| 67
| 1
| 68
| Temporary equity – non-controlling interests
| -
| -
| 8
| 8
| -
| 8
| Balance as at September 30, 2017
| 927
| (110)
| 6,889
| 7,706
| 283
| 7,989
|
STATEMENT OF CHANGES IN EQUITY (CONT'D)
(NIS million)
|
|
|
|
| For the year ended December 31, 2017 (audited)
|
|
|
| Share capital and premium (1)
|
| Accumulated other comprehensive income (loss)
|
| Retained earnings (2)
|
| Total share-holders' equity
|
| Non- controlling interests
|
| Total equity
| Balance at the beginning of the year
|
| 927
| (177)
| 6,571
| 7,321
| 283
| 7,604
| Net profit for the year
|
| -
| -
| 678
| 678
| 26
| 704
| Dividend
|
| -
| -
| (310)
| (310)
| (20)
| (330)
| Other comprehensive income, after tax effect
|
| -
| 57
| -
| 57
| 1
| 58
| Temporary equity – non-controlling interests
|
| -
| -
| 10
| 10
| -
| 10
| Balance as at December 31, 2017
|
| 927
| (120)
| 6,949
| 7,756
| 290
| 8,046
| (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.
| 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: [email protected]
| Investor Relations
Ehud Helft/Gavriel Frohwein
Investor Relations
Tel: +1-646-688-3559
[email protected]
|
 View original content:http://www.prnewswire.com/news-releases/first-international-bank-of-israel-presents-third-quarter-2018-results-300754160.html
SOURCE FIBI-First International Bank of Israel Ltd.
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