TEL AVIV, Israel, Nov. 29, 2023 /PRNewswire/ — First International Bank of Israel (TASE: FIBI) one of Israel’s major banking groups, today announced its results for the third quarter and nine-month period ended September 30, 2023.
Financial Highlights Demonstrating High Financial Resiliance:
- Ratio of Tier 1 equity capital to risk components at 10.84%, 1.6% in excess of the required regulatory ratio;
- High liquidity coverage ratio which increased to a rate of 142%
- Net profit of NIS 455 million for the First International Bank in the third quarter of 2023
- Return on equity of 16%
- In the third quarter, the Bank continued to increase the collective provision for credit losses due to rising uncertainty and an increased level of risk due to the possible economic consequences of the war. Accordingly, credit loss expenses in the third quarter were NIS 165 million (0.55% of the credit portfolio), representing an increase of NIS 122 million, compared with the corresponding quarter last year, entirely due to the collective provision for credit losses.
- The Bank’s non-performing loan (NPL) ratio, which is an indicator of the quality of the credit portfolio, remains at low levels and stands at 0.49%
Financial Results for the Period
The First International Bank today issued its financial report for the first nine months of 2023, reflecting continuing growth in the Bank’s core business, while continuing to maintain financial resilience.
Net earnings in the first nine months of the year for the First International Bank Group totaled NIS 1,673 million, an increase of 48% in comparison with the corresponding period last year. Return on equity reached 20.5%.
In the third quarter of the year, the net profit was NIS 455 million, as compared to NIS 467 million in the corresponding quarter last year, representing a decline of 2.6%, and a decline of 22.5% compared with that of the second and prior quarter in 2023. Return on Equity amounted to 16%.
Total revenue for the first nine months of the year amounted to NIS 5,036 million, an increase of 32.3% as compared to the corresponding period last year. Total revenue for the third quarter amounted to NIS 1,601 million, an increase of 12% as compared to the corresponding quarter last year and a reduction of 7.7% compared with the second quarter of 2023.
Financial profits from current operations in the first nine months of the year increased by 43.7% compared with the corresponding period last year, an increase primarily due to the increase in shekel and dollar interest rates, as well as a growth in the volume of operations.
Total credit loss expense in the third quarter was NIS 165 million, representing 0.55% of the overall credit portfolio and an increase of NIS 122 million as compared to the corresponding quarter of last year. The increase was due to in its entirety to the collective allowance for credit losses because of the uncertainty caused by the economic implications of the war in Israel. In the first nine months of the year, credit loss expenses amounted to NIS 336 million, representing 0.38% of the credit portfolio and an increase of NIS 262 million compared with that of the corresponding period last year. The increase was due to the increase in the collective provision, mainly due to adjustments made to the provision due to concerns related to predicted macro-economic impacts, in view of the uncertainty regarding economic conditions, among others, due to implications of the war, the effect of the rise in interest rates, and the probability of an economic slowdown. The provision for credit losses includes a specific income of NIS 31 million.
The low non-performing loan (NPL) ratio of the Bank, a ratio which indicates the quality of the credit portfolio (a ratio of debts that are either non-accruing or overdue by 90 days or more, to total credit to the public) remain at low levels, and was at 0.49% (with a lower ratio indicating higher credit quality).
Over the past year, the Bank increased its comprehensive coverage ratio (the ratio of the total credit loss allowance out of total credit to the public) by 25%, from a ratio of 1.1% to 1.37%.
Operating and other expenses amounted to NIS 733 million in the third quarter. This was a slight decline compared with operating and other expenses of NIS 740 million as reported in the second quarter of the year, and an increase of 7.5% in relation to the corresponding quarter last year. In the first nine months of the year, operating and other expenses amounted to NIS 2,197 million, an increase of 8.3% due mostly to an increase in payroll expenses due to a provision for bonuses and an increase in ongoing payroll, resulting, among other impacts, from the signing of labor agreements covering the years 2023 to 2026.
The…
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