TEL AVIV, Israel, March 15, 2020 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the fourth quarter and full year of 2019.

Highlights

  • 18% growth year-over-year in net earnings for 2019 to NIS 865 million;
  • Return on equity for 2019: 10.5%;
  • 34.5% growth year-over-year in net earnings for the fourth quarter to NIS 222 million;
  • Return on equity for the fourth quarter: 10.8%;
  • Net interest income in 2019 increased by 4.7% in comparison to 2018, amounting to 2,602 million;
  • The Bank continued to improve efficiency – operating and other expenses decreased by 5.9%, and the efficiency ratio increased to 64.4%;
  • Credit to the public increased by 4.3% to NIS 87,899 million;
  • Deposits from the public increased by 7.5% to NIS 120,052 million;
  • Ratio of Tier I equity capital to risk assets: 10.81%.

Profitability

A year of record profit for the First International Bank:  First International Bank Group increased net earnings in 2019 by 18% to NIS 865 million. Return on equity for 2019 reached 10.5%.

In the fourth quarter of the 2019, net earnings increased by 34.5% year-over-year, amounting to NIS 222 million. Return on equity in the fourth quarter reached 10.8%.

Growth

Net interest income for 2019 increased by 4.7% in comparison to 2018, amounting to NIS 2,602 million, the increase due primarily to growth in the volume of operations.

The broadening of the Group is also clear within the balance sheet data, both on the credit side and on the deposit side.  Deposits from the public grew by 7.5% to NIS 120,052 million. The net credit to the public portfolio in 2019 grew by 4.3% year-over-year, amounting to NIS 87,899 million as of December 31, 2019. The growth in credit is marked by the continued distribution of credit and is noted in the private customer segment, which grew by 4.6%, in the corporate and middle market business segment, which grew by 3.2%, and in the small business segment, which grew by 3.3%.

The growth in the credit portfolio was achieved while maintaining a commensurate risk level: the ratio of credit loss expenses to total credit to the public in 2019 amounted to 0.16% in contrast to 0.20% in 2018.

Efficiency

The First International Bank continues to improve efficiency in accordance with its strategic goals and its efficiency ratio improved to 64.4% in 2019, in comparison to 68.4% in 2018. Operating and other expenses amounted to NIS 2,654 million in 2019, a decrease of 5.9% in relation to 2018.

The decrease in expenses stemmed from the various efficiency measures taken by the Bank and was noted across all expense items, including Payroll and related expenses and which, when compared with last year, were reduced by 5.6%, and maintenance and depreciation of buildings and equipment expenses which were reduced by 6.1%.

The efficiency trend is also reflected by the decrease in the number of positions, which declined by 5% in 2019, as well as by the decrease of 4% in office space in 2019.

Financial stability

The upward trend relating to the capital attributed to the shareholders of the Bank continued, and grew by 5.9% (NIS 475 million) to NIS 8,568 million. The Tier I equity capital ratio increased to 10.81% compared with 10.51% as of December 31, 2018, and the comprehensive capital ratio increased to 13.70%.

In 2019, the Bank distributed dividends in the amount of NIS 410 million. The return on dividend amounted to 4.5%.

The Board of Directors of the Bank resolved on an additional dividend distribution of NIS 125 million.

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group stated: 

"The financial results of the First International Bank Group for 2019 combine the three trends which has characterized the Bank over recent years: the growth in volume of operations, significant efficiency and maintenance of a commensurate level of risk and financial stability.

"Based on the performance of the Bank and its stability, in 2019 all the rating agencies (the local ones: Midrug and Ma'alot, as well as the international one: Moody's) raised the rating of our Bank to the rating which has been applied to the elite of the banking sector in Israel.

"At the end of 2019, the Bank approved a new strategic plan for the coming years, which comprises a direct continuation of our previous corporate strategy, the implementation of which had already been successfully completed some time ago. Furthermore, this year, our Bank initiated an IT infrastructure strategy in addition to its digital strategy, which was already implemented in 2018. These strategic plans are aimed at driving progress forward at the Bank given the changing competitive conditions within the local financial and banking sector. All the while, we are keeping a future vision of the banking world in a way that enables us to continue our growth and maintain our areas of leadership. The leitmotif principles underlying strategic plans are: a focus on customer needs, our pursuit of innovation and continuing our efficiency processes.

"The First International Bank Group continues its consistent efficiency processes in accordance with its strategic outline, with the aim of continuing the trend of improvements in the expense structure and improvements in the efficiency ratio of the Group.

"The success of our Bank in focusing on customer needs, while combining a high level of service, professionalism and digital services, is reflected in our leadership in the results of customer surveys. Furthermore, a Bank of Israel survey recently published, which covered the entire local banking system, awarded First International Bank, first place in customer satisfaction with regard to the Bank's Internet website and mobile application. Likewise, the Bank was also considered outstanding, with regard to customer satisfaction of service at branches."

 

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES


Principal financial ratios


2019


2018


2017


2016


2015











percent

Execution indices











Return on equity attributed to shareholders of the Bank

10.5%

9.3%

9.1%

7.2%

6.5%

Return on average assets

0.63%

0.54%

0.52%

0.41%

0.37%

Ratio of equity capital tier 1

10.81%

10.51%

10.38%

10.09%

9.81%

Leverage ratio

5.81%

5.76%

5.50%

5.52%

5.43%

Liquidity coverage ratio

128%

122%

123%

123%

104%

Ratio of total income to average assets

3.0%

3.1%

2.9%

2.9%

2.9%

Ratio of interest income, net to average assets

1.9%

1.8%

1.8%

1.7%

1.6%

Ratio of fees to average assets

0.9%

1.0%

1.0%

1.0%

1.1%

Efficiency ratio

64.4%

68.4%

69.5%

73.5%

77.6%







Credit quality indices






Ratio of provision for credit losses to credit to the public

1.05%

1.02%

1.03%

1.08%

1.12%

Ratio of impaired debts or in arrears of 90 days or more to credit to the public

1.08%

0.83%

0.92%

1.02%

1.36%

Ratio of provision for credit losses to total impaired credit to the public

131%

186%

155%

147%

108%

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

0.10%

0.16%

0.18%

0.09%

0.15%

Ratio of expenses for credit losses to average total credit to the public

0.16%

0.20%

0.15%

0.10%

0.03%

 












Principal data from the statement of income


2019


2018


2017


2016


2015











NIS million

Net profit attributed to shareholders of the Bank


865


733


678


521


446

Interest Income, net

2,602

2,486

2,302

2,169

1,953

Expenses from credit losses

138

166

121

80

18

Total non-interest income

1,520

1,637

1,450

1,480

1,541

  Of which:  Fees

1,286

1,325

1,305

1,300

1,378

Total operating and other expenses

2,654

2,819

2,607

2,683

2,710

  Of which:  Salaries and related expenses

1,601

1,696

1,579

1,581

1,589

               Dismissal expenses

48

35

16

57

27

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

8.62

7.31

6.76

5.19

4.45

 












Principal data from the balance sheet


2019


2018


2017


2016


2015











NIS million

Total assets


141,110


134,120


135,717


127,907


125,476

of which:    Cash and deposits with banks

37,530

31,303

39,186

29,150

30,727

               Securities

10,995

12,595

10,238

15,776

16,439

               Credit to the public, net

87,899

84,292

80,378

77,328

72,555

Total liabilities

132,186

125,707

127,333

119,973

117,813

  of which:  Deposits from the public

120,052

111,697

113,511

105,817

103,262

               Deposits from banks

1,137

1,150

1,133

755

1,565

               Bonds and subordinated capital notes

3,674

4,989

5,249

5,801

5,862

Capital attributed to the shareholders of the Bank

8,568

8,093


7,756

7,321

7,073

 












Additional data


2019


2018


2017


2016


2015

Share price (0.01 NIS)


9,989


7,860


7,202


5,650


4,594

Dividend per share (0.01 NIS)

410

355

310

199

130

Average number of positions (1)

4,150

4,361

4,512

4,738

5,035

(1)   The number of positions includes conversion of overtime in terms of positions.

 

STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31
(NIS million)




Consolidated


The Bank


2019


2018


2017

2019


2018


2017

Interest Income

3,085

3,001

2,704

2,847

2,312

2,060

Interest Expenses

483

515

402

491

511

397

Interest Income, net

2,602

2,486

2,302

2,356

1,801

1,663

Expenses from credit losses

138

166

121

127

117

47

Net Interest Income after expenses from credit losses

2,464

2,320

2,181

2,229

1,684

1,616

Non-Interest Income







Non-Interest Financing income

225

231

83

233

203

94

Fees

1,286

1,325

1,305

1,144

995

973

Other income

9

81

62

54

151

176

Total non-Interest income

1,520

1,637

1,450

1,431

1,349

1,243

Operating and other expenses







Salaries and related expenses

1,601

1,696

1,579

1,487

1,303

1,179

Maintenance and depreciation of premises and equipment

353

376

380

326

282

278

Amortizations and impairment of intangible assets

92

91

94

89

86

83

Other expenses

608

656

554

583

508

486

Total operating and other expenses

2,654

2,819

2,607

2,485

2,179

2,026

Profit before taxes

1,330

1,138

1,024

1,175

854

833

Provision for taxes on profit

478

408

358

418

319

284

Profit after taxes

852

730

666

757

535

549

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

51

37

54

108

198

129

Net profit:







Before attribution to non-controlling interests

903

767

720

865

733

678

Attributed to non-controlling interests

(38)

(34)

(42)

-

-

-

Attributed to shareholders of the Bank

865

733

678

865

733

678

 










Consolidated and The Bank


Note


2019


2018


2017

Primary profit per share attributed to the shareholders of the Bank

9

NIS

Net profit per share of NIS 0.05 par value


8.62


7.31


6.76

 

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31
(NIS million)




Consolidated



2019


2018


2017

Net profit before attribution to non-controlling interests

903

767

720

Net profit attributed to non-controlling interests

(38)

(34)

(42)

Net profit attributed to the shareholders of the Bank

865

733

678

Other comprehensive income (loss) before taxes:




Adjustments of available for sale securities to fair value, net

101

(102)

90

Adjustments from translation of financial statements(1) net after the effect of hedges(2)

-

-

4

Adjustments of liabilities in respect of employee benefits(3)

(74)

37

1

Other comprehensive income (loss) before taxes

27

(65)

95

Related tax effect

(9)

22

(35)

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

18

(43)

60

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

(2)

(4)

3

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

20

(39)

57

Comprehensive income before attribution to non-controlling interests

921

724

780

Comprehensive income attributed to non-controlling interests

(36)

(30)

(45)

Comprehensive income attributed to the shareholders of the Bank

885

694

735

(1)   Adjustments from translation of financial statements of foreign operations which their currency of operations is different from the currency of operation of the Bank.

(2)   Hedges-gains (losses) regarding the hedging of investment in foreign currency.

(3)   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.

 

BALANCE SHEET AS AT DECEMBER 31
(NIS million)




Consolidated


The Bank


2019


2018

2019


2018

Assets





Cash and deposits with banks

37,530

31,303

36,528

30,905

Securities

10,995

12,595

10,736

10,620

Securities which were borrowed

9

863

9

863

Credit to the public

88,829

85,160

83,713

66,846

Provision for Credit losses

(930)

(868)

(871)

(654)

Credit to the public, net

87,899

84,292

82,842

66,192

Credit to the government

1,039

700

415

7

Investment in equity-basis investees

605

606

1,278

2,878

Premises and equipment

996

1,023

964

960

Intangible assets

248

239

238

226

Assets in respect of derivative instruments

1,091

1,399

1,096

1,416

Other assets(2)

698

1,100

667

929

Total assets

141,110

134,120

134,773

114,996

Liabilities and Shareholders' Equity





Deposits from the public

120,052

111,697

114,836

87,038

Deposits from banks

1,137

1,150

2,640

10,852

Deposits from the Government

353

982

353

777

Bonds and subordinated capital notes

3,674

4,989

2,055

3,455

Liabilities in respect of derivative instruments

1,247

1,294

1,247

1,298

Other liabilities(1)(3)

5,723

5,595

5,074

3,483

Total liabilities

132,186

125,707

126,205

106,903

Capital attributed to the shareholders of the Bank

8,568

8,093

8,568

8,093

Non-controlling interests

356

320

-

-

Total equity

8,924

8,413

8,568

8,093

Total liabilities and shareholders' equity

141,110

134,120

134,773

114,996

 

(1)   Of which: provisions for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 57 million and NIS 64 million (consolidated) and NIS 55 million and NIS 57 million (the Bank) as of December 31, 2019 and 2018, respectively.

(2)   Of which: other assets measured at fair value in the amount of NIS 42 million consolidated and the Bank (31.12.18 - NIS 426 million consolidated and the Bank).

(3)   Of which: other liabilities measured at fair value in the amount of NIS 47 million consolidated and the Bank (31.12.18 - NIS 586 million consolidated and the Bank).

 

STATEMENT OF CHANGES IN EQUITY
(NIS million)




Share capital and premium (1)


Accumulated other comprehensive income (loss)


Retained earnings (2)


Total share-holders' equity


Non- controlling interests


Total equity

Balance as at January 1, 2017

927

(177)

6,571

7,321

283

7,604

Changes during 2017







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 interest

-

-

10

10

-

10

Balance as at December 31, 2017

927

(120)

6,949

7,756

290

8,046

Changes during 2018







Net profit for the year

-

-

733

733

34

767

Dividend

-

-

(355)

(355)

-

(355)

Other comprehensive loss, after tax effect

-

(39)

-

(39)

(4)

(43)

Temporary equity - non-controlling interest

-

-

(2)

(2)

-

(2)

Balance as at December 31, 2018

927

(159)

7,325

8,093

320

8,413

Cumulative effect of the initial implementation of US accepted accounting principals(3)

-

8

(8)

-

-

-

Adjusted balance as at January 1, 2019 after the initial implementation

927

(151)

7,317

8,093

320

8,413

Changes during 2019







Net profit for the year

-

-

865

865

38

903

Dividend

-

-

(410)

(410)

-

(410)

Other comprehensive income (loss), after tax effect

-

20

-

20

(2)

18

Balance as at December 31, 2019

927

(131)

7,772

8,568

356

8,924

(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.

(3)   Cumulative effect of the initial implementation regarding financial instruments of US accepted accounting standards at banks in respect of financial instruments (ASU 2016-01).

 

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: +1-646-201-9246

 

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SOURCE First International Bank of Israel