First International Bank of Israel Presents Full Year And Fourth Quarter 2017 Results

TEL AVIV, Israel , March 06, 2018 /PRNewswire/ -- Highlights for 2017

  • Increase of 30% in net earnings to NIS 678 million
  • Return on equity: 9.1%
  • Increase of 6.1% in net interest income
  • Decrease of 2.8% in operating and other expenses
  • Improvement to 69.5% in the efficiency ratio
  • Ratio of Tier I capital to risk weighted assets: 10.38% at year-end 2017, compared with 10.09% at year-end 2016
  • Ratio of total capital to risk weighted assets of 13.94%
  • Distributed dividends of NIS 310 in 2017, representing an annual dividend yield  of 4.9%
  • Board of Directors declared dividend distribution of NIS 95 million for the fourth quarter of 2017

Profitability

First International Bank Group's net earnings in the year 2017 increased by 30% in comparison to 2016, amounting to NIS 678 million. The return on equity was 9.1%.

In the fourth quarter of 2017, net earnings increased by 41% in comparison to the corresponding period in 2016, amounting to NIS 158 million. The return on equity was 8.4%.

Growth

Net interest income increased in 2017 by 6.1% in comparison to the previous year, amounting to NIS 2,302 million, the growth was due to the increase in volume of operations, mostly from the growth in the credit portfolio.

The growth of the Group was also apparent in the balance sheet data, both on the credit side and on the deposit side. The Bank's customer assets portfolio grew by 12.8% (by approximately NIS 50 billion) and reached NIS 442 billion. Deposits by the public grew by 7.3% and credit to the public grew by 3.9%.

The growth in the credit portfolio was marked by the continued spread of credit. It was primarily noted in the private customer segment which grew by 8.5%. It was also noted in mortgages segment which grew by 5.1% and in credit granted to the small and middle business market segment, which grew by 6.0%.

The growth in the credit portfolio was achieved while maintaining an appropriate risk level: the ratio of credit loss expenses to total credit to the public in 2017 amounted to 0.15%.

Efficiency

The First International Bank continued to improve efficiencies in line with its strategic goals, and a decrease of 2.8% was noted in total operating and other expenses, which amounted to NIS 2,607 million. The reduction in expenses was reflected across all expense items.

Payroll and related expenses amounted in 2017 to NIS 1,627 million, representing a reduction of 1.8%. The efficiency trend can be noted in the decrease in the number of positions, which declined in 2017 by 3.7%, as well as a reduction in the office space in use by the Bank, which decreased in 2017 by 9%.

This decrease in expenses supports the gradual and consistent improvement in the efficiency ratio, which improved to 69.5% in 2017 as compared with 73.5% in 2016.

In 2017, the Bank sold its operations in Switzerland. The sale process led to a temporary increase in expenses relating to the closing down process and due to the reduction in income from the Swiss operations. The results of the sale are expected to positively contribute to improvements in the efficiency ratio in 2018.

Financial Stability

The upward trend relating to the capital attributed to the shareholders of the Bank continued, and grew by 5.9% (NIS 435 million) to NIS 7,756 million. The Tier I equity capital ratio increased to 10.38% in comparison to 10.09% as of December 31, 2016, and the total capital ratio increased to 13.94%.

In 2017, the Bank distributed dividends in the amount of NIS 310 million, representing a dividend yield of 4.9%. Furthermore, the Board of Directors of the Bank resolved on an additional dividend distribution of NIS 95 million for the fourth quarter.

Management Comment

Mrs. Smadar Berber-Tsadik, CEO of the First International Bank Group: "The financial results of the First International Bank for 2017 reflect the ongoing growth of the Group, as apparent in the consistent growth of the credit portfolio, in the deposits of the public and in the customer assets portfolio. Our growth trend has continued for a number of years, and we have demonstrated an average growth rate of over 5% per annum in the credit portfolio. I emphasize that we are achieving this growth while maintaining the quality of the Bank assets, an appropriate risk level, a healthy mix in the credit portfolio, and an increase in our loan book diversity. The strong capital ratios of the First International Bank enable this ongoing growth, while allowing us to continue to share dividends with our shareholders.

Continued Mrs. Berber-Tsadik, "Another positive trend reflected in our financial results, is the consistent and significant improvement in our efficiency ratios. This has been made possible by a combination of growing income with declining expenses. We continue to implement efficiency measures in accordance with our strategy of improvements in work procedures, merger of branches and Head Office units, and reduction in the number of positions. Looking ahead to 2018, we will continue to implement efficiency measures with the aim of ongoing gradual and consistent improvement in our efficiency ratios.

"The First International Bank maintains its leadership position in the capital market, both in the professional field and in the digital field. In 2017, we focused on unique and innovative digital developments, such as the cellular consulting system 'ADVISE ME', an upgraded capital market website and more. 2017 was also characterized by a significant improvement in the digital field as well as in our innovation, both in regards to the capital market as well as in the range of banking operations we provide. Our goal is the upgrade of the customer experience by providing our customers with advanced and efficient service channels, which complement the personal and professional services that we provide at our branches."

 

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES












Principal financial ratios


2017


2016


2015


2014


2013











percent

Execution indices











Return on equity

9.1%

7.2%

6.5%

6.8%

8.4%

Return on assets

0.5%

0.4%

0.4%

0.4%

0.5%

Ratio of equity capital tier 1

10.38%

10.09%

9.81%

9.69%

9.98%

Leverage ratio(1)

5.50%

5.52%

5.43%



Liquidity coverage ratio(1)

123%

123%

104%



Efficiency ratio

69.5%

73.5%

77.6%

77.3%

74.3%







Credit quality indices






Ratio of provision for credit losses to credit to the public

1.03%

1.08%

1.12%

1.25%

1.19%

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

0.95%

1.02%

1.36%

1.50%

1.79%

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

155%

147%

108%

110%

83%

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

0.18%

0.09%

0.15%

0.05%

0.14%

 












Principal data from the statement of income


2017


2016


2015


2014


2013











NIS million

Net profit attributed to shareholders of the Bank


678


521


446


455


538

Interest Income, net

2,302

2,169

1,953

2,101

2,187

Expenses from credit losses

121

80

18

89

97

Total non Interest income

1,450

1,480

1,541

1,667

1,664

  Of which: Fees

1,305

1,300

1,378

1,375

1,418

Total operating and other expenses

2,607

2,683

2,710

2,912

2,860

  Of which: Salaries and related expenses

1,627

1,656

1,629

1,780

1,746

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

6.76

5.19

4.45

4.54

5.36

 












Principal data from the balance sheet


2017


2016


2015


2014


2013











NIS million

Total assets


135,717


127,907


125,476


117,807


111,025

of which:   Cash and deposits with banks

39,186

29,150

30,727

29,182

26,100

             Securities

10,238

15,776

16,439

12,554

10,799

             Credit to the public, net

80,378

77,328

72,555

68,931

68,680

Total liabilities

127,333

119,973

117,813

110,764

104,124

of which:   Deposits from banks

1,133

755

1,565

1,469

1,335

             Deposits from the public

113,511

105,817

103,262

95,155

89,122

             Bonds and subordinated capital notes

5,249

5,801

5,862

4,903

5,702

Capital attributed to the shareholders of the Bank

7,756

7,321


7,073

6,797

6,673

 












Additional data


2017


2016


2015


2014


2013












Share price (0.01 NIS)


7,202


5,650


4,594


4,990


4,766

Dividend per share (0.01 NIS)

309

199

130

284

199

Number of positions(2)

4,451

4,623

4,858

5,114

5,214

Ratio of fees to assets

1.0%

1.0%

1.1%

1.2%

1.3%

(1)   According to instructions of the Bank of Israel the Leverage ratio and the Liquidity coverage ratio were calculated since 2015. Therefor no comparative data is stated.
(2)   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


Note

2017


2016


2015

2017


2016


2015

Interest Income

2

2,704

2,526

2,260

2,060

1,873

1,521

Interest Expenses

2

402

357

307

397

342

283

Interest Income, net

2

2,302

2,169

1,953

1,663

1,531

1,238

Expenses from credit losses

13,29

121

80

18

47

45

11

Net Interest Income after expenses from credit losses


2,181

2,089

1,935

1,616

1,486

1,227

Non Interest Income








Non Interest Financing income

3

83

115

149

94

99

95

Fees

4

1,305

1,300

1,378

973

954

839

Other income

5

62

65

14

176

188

193

Total non Interest income


1,450

1,480

1,541

1,243

1,241

1,127

Operating and other expenses








Salaries and related expenses

6

1,627

1,656

1,629

1,215

1,227

1,054

Maintenance and depreciation of premises and equipment


380

409

428

278

299

269

Amortizations and impairment of intangible assets

17

94

116

131

83

82

86

Other expenses

7

506

502

522

450

427

416

Total operating and other expenses


2,607

2,683

2,710

2,026

2,035

1,825

Profit before taxes


1,024

886

766

833

692

529

Provision for taxes on profit

8

358

398

326

284

301

213

Profit after taxes


666

488

440

549

391

316

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

15

54

72

38

129

130

130

Net profit:








Before attribution to noncontrolling interests


720

560

478

678

521

446

Attributed to noncontrolling interests


(42)

(39)

(32)

-

-

-

Attributed to shareholders of the Bank


678

521

446

678

521

446

 










Consolidated and The Bank


Note


2017


2016


2015

Primary profit per share attributed to the shareholders of the Bank

9

NIS

Net profit per share of NIS 0.05 par value


6.76


5.19


4.45

*    The data for 2015 does not include the data for PAGI and UBank, which were merged in 2015 with and into the Bank, and were included in that year in the consolidated data.


The notes to the financial statements are an integral part thereof.

 

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31(1)
(NIS million)










Consolidated



2017


2016


2015

Net profit before attribution to noncontrolling interests

720

560

478

Net profit attributed to noncontrolling interests

(42)

(39)

(32)

Net profit attributed to the shareholders of the Bank

678

521

446

Other comprehensive income (loss) before taxes:




Adjustments of available for sale securities to fair value, net

90

14

(75)

Adjustments from translation of financial statements(2) net after the effect of hedges(3)

4

(2)

-

Adjustments of liabilities in respect of employee benefits(4)

1

(131)

11

Other comprehensive income (loss) before taxes

95

(119)

(64)

Related tax effect

(35)

37

24

Other comprehensive income (loss) before attribution to noncontrolling interests, after taxes

60

(82)

(40)

Less other comprehensive income (loss) attributed to noncontrolling interests

3

(10)

(2)

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

57

(72)

(38)

Comprehensive income before attribution to noncontrolling interests

780

478

438

Comprehensive income attributed to noncontrolling interests

(45)

(29)

(30)

Comprehensive income attributed to the shareholders of the Bank

735

449

408

(1)   See Note 10.
(2)   Adjustments from translation of financial statements of foreign operations which their currency of operations is different from the currency of operation of the Bank.
(3)   Hedges-gains (losses) regarding the hedging of investment in foreign currency.
(4)   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.

The notes to the financial statements are an integral part thereof.

 

BALANCE SHEET AS AT DECEMBER 31
(NIS million)
















Consolidated


The Bank


Note

2017


2016

2017


2016

Assets






Cash and deposits with banks

11

39,186

29,150

33,551

23,332

Securities

12, 26

10,238

15,776

8,685

13,523

Securities which were borrowed


813

414

813

414

Credit to the public

13, 29

81,216

78,175

63,523

61,746

Provision for Credit losses


(838)

(847)

(607)

(653)

Credit to the public, net


80,378

77,328

62,916

61,093

Credit to the government

14

675

654

-

7

Investments in investee companies

15

565

514

2,657

2,541

Premises and equipment

16

1,095

1,133

991

1,019

Intangible assets

17

235

243

222

219

Assets in respect of derivative instruments

 27A, 27B

1,342

1,332

1,363

1,342

Other assets(2)

18

1,186

1,020

1,030

784

Assets held for sale

18A

4

343

2

45

Total assets


135,717

127,907

112,230

104,319

Liabilities, temporary equity and Shareholders' Equity






Deposits from the public

19

113,511

105,817

91,035

84,403

Deposits from banks

20

1,133

755

4,168

3,576

Deposits from the Government


960

570

817

296

Bonds and subordinated capital notes

21

5,249

5,801

3,637

4,019

Liabilities in respect of derivative instruments

27A, 27B

1,318

1,356

1,322

1,356

Other liabilities(1)(3)

22

5,162

4,929

3,157

3,018

Liabilities held for sale

18A

-

745

-

-

Total liabilities


127,333

119,973

104,136

96,668

Temporary equity - noncontroling interests


338

330

338

330

Capital attributed to the shareholders of the Bank


7,756

7,321

7,756

7,321

Noncontrolling interests


290

283

-

-

Total equity


8,046

7,604

7,756

7,321

Total liabilities, temporary equity and shareholders' equity


135,717

127,907

112,230

104,319

(1)   Of which: provisions for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 61 million and NIS 71 million (consolidated) and NIS 54 million and NIS 62 million (the Bank) as of December 31, 2017 and 2016, respectively.
(2)   Of which: other assets measured at fair value in the amount of NIS 423 million consolidated and the Bank (31.12.16 - NIS 238 million consolidated and the Bank).
(3)   Of which: other liabilities measured at fair value in the amount of NIS 521 million consolidated and the Bank (31.12.16 - NIS 491 million consolidated and the Bank).

The notes to the financial statements are an integral part thereof.

For more information, visit http://www.fibi.co.il

Contact: 
Dafna Zucker,
Spokeswoman and IR Officer FIBI
zucker.d@fibi.co.il 
+972-3-5196219

Investor Relations Contact:
Ehud Helft/Gavriel Frohwein
Tel: +1-646-688-3559
firstinternationalbank@gkir.com

Cision View original content:http://www.prnewswire.com/news-releases/first-international-bank-of-israel-presents-full-year-and-fourth-quarter-2017-results-300608826.html

SOURCE FIBI-First International Bank of Israel Ltd.



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