Mizrahi-Tefahot Bank released its first-quarter financials today, reporting a net profit of NIS 1.27 billion, 6.9% less than in the corresponding quarter of 2023, but 21% more than in the previous quarter, which was an unusually bad quarter. For all banks after the outbreak of war.
The bank's annual return on shareholders' equity in the first quarter was 18.1%, compared to 22.4% in the corresponding quarter and 15.5% in the previous quarter. The other two major banks that have so far released first-quarter results, Discount Bank and Bank Hapoalim, announced an annual return on equity of 14.6%.
Mizrahi Tefahot will distribute dividends of NIS 508.8 million, or 40% of first-quarter profits, which is in line with the dividend policy. Mizrahi Tefahot CEO Moshe Lari said that the announcement of the maximum dividend under the bank's dividend policy was made after examining capital ratios under various scenarios, following the Superintendent of Banks' letter dated May 16, in which he requested and should exercise this judgment on Dividend.
Total credit to the public amounted to NIS 330.5 billion at the end of the first quarter, compared to NIS 312.3 billion at the end of the corresponding quarter, representing a growth of 6%. Both Bank Hapoalim and Discount Bank reported just 1% growth in their credit portfolios.
Despite the growth in the credit portfolio, total financing income amounted to NIS 3 billion in the first quarter, 6.3% lower than in the corresponding quarter, but 20% higher than in the previous quarter.
The decrease compared to the corresponding quarter is mainly due to higher interest rates on sources (deposit account interest), transfer of balances from non-interest-bearing current accounts to deposit accounts, and a more moderate rise in the consumer price index. Which affects loans linked to the index.
The bank's provisions for credit losses decreased compared to the corresponding quarter to NIS 175 million, but are still high compared to Discount Bank and Hapoalim Bank.
Like Discount Bank and Bank Hapoalim, Mizrahi Tfahot began paying a war tax intended to help the government achieve its fiscal goals. The law under which the major banks will pay NIS 2.5 billion on account for 2024-2025 only came into effect on April 1, but the three banks spread the payment across the first quarter. Mizrahi-Tefahot Bank will transfer NIS 60 million to the state from first-quarter profits. Hapoalim Bank transferred twice this amount, and Discount Bank transferred 53 million shekels.
Published by Globes, Israel Business News – en.globes.co.il – on May 23, 2024.
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