First International Bank of Israel Presents First Quarter 2022 Results

Published: May. 24, 2022 at 7:09 AM EDT

TEL AVIV, Israel, May 24, 2022 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the first quarter of 2022, ended March 31, 2022.

Financial Highlights for the First Quarter of 2022

  • Net profit of NIS 322 million- Growth of 5.9% compared to the corresponding quarter last year;
  • Return on equity of 13%;
  • Growth of 5% in credit to the public and growth of 14.7% in the past year;
  • Ratio of tier I equity capital to risk components of 10.79%, 1.54% higher than the required regulatory ratio - the highest gap among the banks in Israel; the excess capital enables growth in credit and  for ongoing business development;
  • The Board of Directors approved a dividend distribution amounting to 50% of net income.

Profitability

Net profit of the First International Bank Group in the first quarter of 2022, amounted to NIS 322 million, as compared to NIS 304 million in the corresponding first quarter of 2021, an increase of 5.9%. Return on equity reached 13%.

Growth and Efficiency

The First International Bank continues its consistent trend of growth, which is demonstrated across all core areas of the Bank's operations.

Revenue in the first quarter increased by 5.3%, compared to the first quarter of last year. Net interest income increased by 11% and commission income increased by 6.4%.

Credit to the public increased by 14.7% compared with that of the first quarter of last year, amounting to a total of NIS 107,342 million. In the first quarter of 2022, credit to the public grew by 5%. The growth in credit was across all fields of operation: compared with that of the first quarter of last year, the middle market business segment grew by 22.5%, the small business segment grew by 16.7%, the large business segment grew by 20.5%, credit to households grew by 6%, and the residential loan segment grew by 14.7%.

The customer's assets portfolio (average) increase by NIS 47 billion, representing growth of 8.5% compared with that of the first quarter of last year and amounted to NIS 596 billion.

No credit loss expense was recorded in the first quarter of 2022. This compares to an credit loss income of NIS 9 million, in the first quarter of last year. The total value of problematic credit declined by 22% compared with that of the first quarter of last year and it declined by 12.4% as compared to that of year-end 2021.

The efficiency ratio amounted to 58.5% in the first quarter of 2022. This demonstrates an improvement compared with 59.0% as of the corresponding period last year.

Operating and other expenses in the first quarter of 2022 amounted to NIS 684 million, a growth of 4.3% as compared to first quarter of last year. This growth is due to the rise in payroll expenses due to timing differences in the components payroll which are of a fluctuating nature, among others impacts. Maintenance and depreciation of building and equipment expenses decreased by 4.7% compared with the first quarter of last year, mainly due to the decrease in the overall scope of real estate assets of the Group, due to efficiency measures taken.

Financial stability

The equity attributed to the shareholders of the Bank grew by 3.7% year-over-year, (representing an absolute growth of NIS 356 million) and amounted to NIS 9,851 million as of March 31, 2022. The Tier I equity capital ratio reached 10.79% with a positive excess of 1.54% over the required regulatory ratio - the highest gap among the banks in Israel. This capital surplus allows for growth in credit and for the continuation of business development activities.

The Bank continued its dividend policy, by which it distributes dividends of up to 50% of net income. Accordingly, the Board of Directors today approved a dividend distribution of NIS 160 million, which comprises 50% of net income for the first quarter of 2022 - the highest among the banks in Israel. This is in addition to dividends of NIS 380 million distributed during the first quarter of the year. The annual divided return as of May 5, 2022, amounted to 7.33%, which is the highest among the banks in Israel.

Innovation

The First International Bank continues to strengthen its connection with its customers, offering unique and competition generating products, such as its Multibank system which shows the customer the details of all their accounts at the different banks, thus encouraging competition. The First International Bank was the first of all banks to introduce a system of this kind.

Additional innovations are: the loyalty program, Beyond, providing for a customer experience in the world of aviation and tourism, the launch of an academic school for capital markets education, which is a professional digital course for the Bank's customers, the Life Plan program which is a holistic digital tool for investment management, and more. The Bank continues to invest in digital and innovation across all fields of its operations, and recently, the innovation and digital group at the Bank was expanded to a full department, which also includes strategy. digital and innovation

Management Comment

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group, stated: "The results for the first quarter of 2022, are due to continued growth in the current core operations of the Bank across the various fields of activity. We achieved all this while maintaining a high level of capital adequacy enabling growth, as well as financial stability and asset quality. The Bank continues to continuously innovate and develop investment and savings products which are tailored to current market conditions and economic trends."

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES

Principal financial ratios


For the three months
ended March 31


For the year ended
December 31



2022


2021


2021







in %

Execution indices







Return on equity attributed to shareholders of the Bank(1)

13.0%

*13.1%

14.7%

Return on average assets(1)

0.71%

*0.72%

0.82%

Ratio of equity capital tier 1

10.79%

11.57%

11.46%

Leverage ratio

5.26%

*5.32%

5.34%

Liquidity coverage ratio(2)

126%

140%

128%

Net stable funding ratio(3)

137%


**139%

Ratio of total income to average assets(1)

2.6%

2.6%

2.6%

Ratio of interest income, net to average assets (1)

1.6%

1.6%

1.6%

Ratio of fees to average assets (1)

0.8%

0.9%

0.8%

Efficiency ratio

58.5%

*59.0%

58.3%





Credit quality indices




Ratio of provision for credit losses to credit to the public

1.01%

1.35%

1.05%

Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public

0.59%

0.73%

0.62%

Ratio of provision for credit losses to total non-accruing credit to the public

175%

259%

244%

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

(0.02%)

0.03%

(0.01%)

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

-

(0.04%)

(0.23%)






Principal data from the statement of income


For the three months
ended March 31



2022


2021





NIS million

Net profit attributed to shareholders of the Bank


322


*304

Interest Income, net

744

670

Income from credit losses

-

9

Total non-Interest income

426

*441

   Of which:      Fees

384

361

Total operating and other expenses

684

656

   Of which:      Salaries and related expenses

414

398

                           Dismissal expenses

2

3

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

3.21

*3.03








Principal data from the balance sheet


31.3.22


31.3.21


31.12.21







NIS million

Total assets


182,013


*172,500


180,470

of which:    Cash and deposits with banks

53,979

59,471

57,370

            Securities

14,850

*14,730

15,091

            Credit to the public, net

106,254

92,321

101,164

Total liabilities

171,725

*162,598

170,033

of which:    Deposits from the public

154,038

146,600

153,447

            Deposits from banks

6,504

3,326

5,144

            Bonds and subordinated capital notes

3,675

3,716

3,356

Capital attributed to the shareholders of the Bank

9,851

*9,495


10,003








Additional data


31.3.22


31.3.21


31.12.21

Share price (0.01 NIS)


13,810


9,313


12,950

Dividend per share (0.01 NIS)

379

-

543

*    Immaterial adjustment of comparative data.
**   Reclassified.
(1)     Annualized.
(2)    The ratio is computed in respect of the three months ended at the end of the reporting period.
(3)     According to instructions of the Bank of Israel the Net stable funding ratio was calculated since 2021, Therefor no comparative data for the three months ended March 31, 2021 is stated.

CONSOLIDATED STATEMENT OF INCOME

 

 




(NIS million) 



For the three months
ended March 31


For the year ended
December 31



2022


2021


2021


(unaudited)

(unaudited)

(audited)

Interest Income

871

729

3,150

Interest Expenses

127

59

356

Interest Income, net

744

670

2,794

Income from credit losses

-

(9)

(216)

Net Interest Income after expenses from credit losses

744

679

3,010

Non- Interest Income




Non-Interest Financing income

34

*76

303

Fees

384

361

1,444

Other income

8

4

9

Total non- Interest income

426

441

1,756

Operating and other expenses




Salaries and related expenses

414

398

1,601

Maintenance and depreciation of premises and equipment

81

85

340

Amortizations and impairment of intangible assets

27

26

105

Other expenses

162

147

606

Total operating and other expenses

684

656

2,652

Profit before taxes

486

464

2,114

Provision for taxes on profit

169

*161

728

Profit after taxes

317

303

1,386

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

17

13

69

Net profit:




Before attribution to non–controlling interests

334

316

1,455

Attributed to non–controlling interests

(12)

(12)

(50)

Attributed to shareholders of the Bank

322

304

1,405







NIS

Primary profit per share attributed to the shareholders of the Bank







Net profit per share of NIS 0.05 par value

3.21

3.03

14.00

*         Immaterial adjustment of comparative data.

STATEMENT OF COMPREHENSIVE INCOME

 




 


(NIS million)

 



For the three months
ended March 31


For the year ended
December 31


2022


2021


2021


(unaudited)


(unaudited)


(audited)

Net profit before attribution to non–controlling interests


334


*316


1,455

Net profit attributed to non–controlling interests

(12)

(12)

(50)

Net profit attributed to the shareholders of the Bank

322

304

1,405

Other comprehensive income (loss) before taxes:




Adjustments of available for sale bonds to fair value, net

(216)

11

27

Adjustments of liabilities in respect of employee benefits(1)

131

66

(24)

Other comprehensive income (loss) before taxes

(85)

77

3

Related tax effect

30

(26)

(1)

Other comprehensive income (loss) before attribution to non–controlling interests, after taxes

(55)

51

2

Less other comprehensive income (loss) attributed to non–controlling interests

(5)

1

-

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

(50)

50

2

Comprehensive income before attribution to non–controlling interests

279

367

1,457

Comprehensive income attributed to non–controlling interests

(7)

(13)

(50)

Comprehensive income attributed to the shareholders of the Bank

272

354

1,407

*          Immaterial adjustment of comparative data.

(1)   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 income.

CONSOLIDATED BALANCE SHEET

 




 


(NIS million)

 



31.3.22


31.3.21


31.12.21


(unaudited)

(unaudited)

(audited)

Assets




Cash and deposits with banks

53,979

59,471

57,370

Securities

14,850

*14,730

15,091

Securities which were borrowed

322

244

845

Credit to the public

107,342

93,581

102,240

Provision for Credit losses

(1,088)

(1,260)

(1,076)

Credit to the public, net

106,254

92,321

101,164

Credit to the government

843

659

811

Investments in investee company

740

648

713

Premises and equipment

912

954

931

Intangible assets

297

265

300

Assets in respect of derivative instruments

2,332

1,603

1,709

Other assets(2)

1,484

1,605

1,536

Total assets

182,013

172,500

180,470

Liabilities and Shareholders' Equity




Deposits from the public

154,038

146,600

153,447

Deposits from banks

6,504

3,326

5,144

Deposits from the Government

476

694

960

Bonds and subordinated capital notes

3,675

3,716

3,356

Liabilities in respect of derivative instruments

2,360

1,554

2,038

Other liabilities(1)(3)

4,672

*6,708

5,088

Total liabilities

171,725

162,598

170,033

Capital attributed to the shareholders of the Bank

9,851

*9,495

10,003

Non–controlling interests

437

407

434

Total equity

10,288

9,902

10,437

Total liabilities and shareholders' equity

182,013

172,500

180,470

*       Immaterial adjustment of comparative data.

(1)   Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 134 million and NIS 88 million and NIS 79 million at 31.3.22, 31.3.21 and 31.12.21, respectively.
(2)   Of which: other assets measured at fair value in the amount of NIS 261 million and NIS 375 million and NIS 333 million at 31.3.22, 31.3.21 and 31.12.21, respectively.
(3)   Of which: other liabilities measured at fair value in the amount of NIS 435 million and NIS 375 million and NIS 641 million at 31.3.22, 31.3.21 and 31.12.21, respectively.

STATEMENT OF CHANGES IN EQUITY

 

 






(NIS million)










For the three months ended March 31, 2022 (unaudited)



Share

capital and

premium

(1)


Accumulated

other

comprehensive

loss

 


Retained

earnings

(2)


 

 

Total


Non-

controlling

interests


 

Total

equity


Balance as at December 31, 2021 (audited)

927

(181)

9,257

10,003

434

10,437


Adjustment of the opening balance, net of tax, due to the
 effect of initial implementation*

-

-

(44)

(44)

(4)

(48)


Adjusted balance at January 1, 2022, following initial implementation

927

(181)

9,213

9,959

430

10,389


Net profit for the period

-

-

322

322

12

334


Dividend

-

-

(380)

(380)

-

(380)


Other comprehensive loss, net after tax effect

-

(50)

-

(50)

(5)

(55)


Balance as at March 31, 2022

927

(231)

9,155

9,851

437

10,288


















For the three months ended March 31, 2021 (unaudited)



Share

capital and

premium

(1)


Accumulated

other

comprehensive

income

(loss)


Retained

earnings

(2)


Total


Non-

controlling

interests


Total

equity


Balance as at December 31, 2020 (audited)

927

(183)

8,397

9,141

394

9,535


Net profit for the period

-

-

**304

304

12

316


Other comprehensive income, net after tax effect

-

50

-

50

1

51


Balance as at March 31, 2021

927

(133)

8,701

9,495

407

9,902


















For the year ended December 31, 2021 (audited)



Share

capital and

premium

(1)


Accumulated

other

comprehensive

income

(loss)


Retained

earnings

(2)


Total


Non-

controlling

interests


Total

equity


Balance as at December 31, 2020 (audited)

927

(183)

8,397

9,141

394

9,535


Net profit for the year

-

-

1,405

1,405

50

1,455


Dividend

-

-

(545)

(545)

(10)

(555)


Other comprehensive income, after tax effect

-

2

-

2

-

2


Balance as at December 31, 2021

927

(181)

9,257

10,003

434

10,437


*     Cumulative effect of the initial implementation of US accounting principles in the matter of financial instruments – credit losses (ASC-326).
**      Immaterial adjustment of comparative data.

(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.

Contact:

Dafna Zucker
First International Bank of Israel
E-mail: zucker.d@fibi.co.il
Tel: +972-3-519-6224

Ehud Helft
GK Investor & Public Relations
E-mail: fibi@gkir.com
Tel: +1-646-201-924

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SOURCE First International Bank of Israel

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