Press Releases
Leumi concludes Q3 2023 with an approximate NIS 1.8 billion ($463 million) profit
Return on equity - 13.6% • Best efficiency ratio among Israeli banks - 32.3% • Robust financial indicators -Liquidity coverage ratio of 130%, CET1 ratio of 11.30% • NPL ratio, which reflects the quality of the Bank's loan portfolio, continues to be amongst the lowest in the Israeli banking system – 0.74% • Following the Bank of Israel's letter regarding dividend distribution on the back of the uncertainty in the markets in light of the War, Leumi is decreasing the dividend to 20% of its net income - NIS 353 million ($92 million) • Following the Bank of Israel's letter regarding loan loss expenses on the back of the War and Leumi's extensive relief program for customers, the Bank increased its loan loss expenses (mainly the collective provision) to NIS 991 million ($259 million) • Total estimated costs of the relief program and donations provided by Leumi following the War is estimated at NIS 560 million ($146 million)
TEL AVIV – November 29, 2023
Bank Leumi (TASE: LUMI) published today its financial statements for Q3 2023:
Net income in the third quarter of 2023 amounted to NIS 1.77 billion ($463 million), compared to NIS 1.78 billion ($465 million) in the corresponding quarter last year. Net income in the first nine months of 2023 amounted to NIS 5.2 billion ($1.36 billion), compared to NIS 5.38 billion ($1.41 billion) in the corresponding period last year.
Return on equity in the third quarter of 2023 was 13.6%, compared with 14.9% in the corresponding quarter last year. Return on equity in the first nine months of 2023 was 13.6%, compared with 16.3% in the corresponding period last year.
Efficiency ratio in the third quarter of 2023 was 32.3%, compared with 39.1% in the corresponding quarter last year. Efficiency ratio in the first nine months of 2023 was 31.4%, compared with 39.9% in the corresponding period last year.
Dividend: On the back of the uncertainty in the markets in light of the War, and the clarifications published by the Bank of Israel, Leumi is decreasing the dividend to 20% of its net income - NIS 353 million ($92 million).
In addition, thus far the Bank has completed a share buyback of NIS 600 million ($157 million), out of an overall plan of up to NIS 800 million ($209 million). On the back of the uncertainty in the markets and the clarifications published by the Bank of Israel, at this stage the Bank will not proceed with the buyback plan.
Responsible growth in the loan portfolio in strategic segments: The Bank continues to focus its growth on the credit portfolio in the corporate, commercial and mortgage segments. From the beginning of 2023, the credit portfolio grew by a total of 8.4%. The corporate portfolio grew by 15.6%, the commercial portfolio - by 5.9%, and the mortgage portfolio - by 7.2%.
High capital adequacy: Common Equity Tier 1 capital ratio as of September 30, 2023 was 11.30% and total capital ratio was 14.42%.
Liquidity coverage ratio as of September 30, 2023 was 130%.
The NPL ratio, which reflects the quality of the Bank's loan portfolio, continues to be amongst the lowest in the Israeli banking system - 0.74% as of September 30, 2023.
Loan loss expenses in the third quarter of 2023 reflect an expense rate of 0.95% of the average outstanding loans to the public, of which 0.83% is in respect of the collective provision. The increase in the loan loss expenses, which amounted to NIS 991 million ($259 million) in the third quarter, is following the Bank of Israel's letter regarding loan loss expenses on the back of the War and Leumi's extensive relief program. Most of the increase, as aforementioned, stems from the collective provision.
The Bank’s initiatives due to the War: Leumi significantly expanded the Bank of Israel's relief program, publishing its own relief program to both business and retail customers from across Israel – with an emphasis on residents of the communities surrounding Gaza and Southern Israel, with the aim of assisting them as much as possible during these complex times. The reliefs to eligible customers include, among others: full exemption from mortgage payments, exemption from loan repayments for retail customers and small businesses, aid funds totaling more than NIS 1 billion ($262 million), exemption from current account fees, and more.
In addition, since the outbreak of the War, the Bank made substantial donations to first responder and aid organizations for the benefit of residents of southern Israel, Israeli Police officers and IDF soldiers - both on active and reserve duty. Moreover, Leumi was the first business organization in Israel to announce its support of a community near Gaza, which was attacked on October 7th. The Bank committed to support Kibbutz Be’eri, one of the communities which suffered the most severe attacks - from providing solutions to immediate needs and up to its complete rehabilitation. Furthermore, the Bank led an initiative under which college and university students who volunteer to assist farmers in harvesting crops on an ongoing basis, receive a full year’s tuition from Bank Leumi. Total costs of the reliefs and donations provided following the War is estimated at NIS 560 million ($146 million).
Sale of Leumi's HQ buildings: As part of the preparations to complete the transition of the Bank’s headquarters to Lod, during April 2022 and March 2023, the Bank entered into an agreement to sell its two headquarters buildings in Tel Aviv. These sales are expected to generate a pre-tax capital gain of some NIS 800 million ($209 million) in the first quarter of 2024, once the transition has been completed.