Israel Bank Leumi Reports Q4 Net Profit Increase, Decrease in Deferrals
Band Steven Scheer
JERUSALEM, March 9 (Reuters) – Bank Leumi LUMI.TA, one of Israel’s two largest lenders, announced a 20% increase in fourth quarter net profit and said most customers have started repaying deferred loans due to the pandemic.
Net profit reached 890 million shekels ($ 267 million) from 742 million a year earlier, reflecting lower overall spending and higher fundraising income, Leumi said.
Net interest income rose from NIS 2.16 billion to NIS 2.22 billion, although expenditure on loan losses to protect against defaults increased from NIS 158 million to NIS 270 million.
During the pandemic and through January 31, Leumi said it deferred mortgage payments of NIS 900 million and small business loans totaling NIS 1.2 billion. Only 360 million mortgage payments and 170 million shekels in business loans still have deferred status, he said.
He also said he approved a total of NIS 6.4 billion in business loans under the state-backed loan fund for crisis-affected businesses and a loan fund for high-income businesses. risk.
Leumi’s Tier 1 capital to risky assets ratio stood at 11.87% at the end of December, compared to 11.88% a year earlier.
For 2020 as a whole, Leumi’s profit fell 40 percent to NIS 2.1 billion as its loan loss expenses quadrupled to NIS 2.55 billion.
CEO Hanan Friedman said Leumi will expand its digital banking and artificial intelligence technologies to offer more products. “We believe this has substantial potential,” he said.
On Sunday, Israel’s banking regulator said banks would not be allowed to issue dividends or buy back shares until at least the fourth quarter.
“Israeli banks have entered the current crisis in great shape thanks to years of conservative lending practices,” said Barclays analyst Tavy Rosner.
“We believe that banks are capable of overcoming the current challenges, especially in light of the roll-out of vaccination (90% of over 50) and the reopening of shops, restaurants and hotels,” Rosner said.
Leumi’s rival Hapoalim POLI.TA is expected to release its results on Thursday.
($ 1 = 3.3357 shekels)
(Reporting by Steven Scheer; editing by Jason Neely)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.