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First International Bank of Israel Reports Financial Results for the Third Quarter of 2024

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Nov 25, 2024, 2:04 AM ET

Reflects continued growth and high profitability while maintaining financial stability

TEL AVIV, Israel, Nov. 25, 2024 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the third quarter and nine-month period ended September 30, 2024.

Financial Highlights

Financial Highlights for the Third Quarter of 2024

Net income of NIS 620 million and a return on equity of 19.4% in the third quarter of 2024;
Net income of NIS 1,798 million and a return on equity of 19.4% for the first nine months of the year;
Credit to the public grew by 6% compared to the end of 2023 and by 3.5% compared to the second quarter of the year;
Deposits by the public grew by 11.4% compared to the end of 2023, and by 4.3% compared to the second quarter of the year;
The portfolio of customers' assets grew by 19% compared to the end of 2023, and reached NIS 800 billion;
Equity attributed to the Bank's shareholders was NIS 13 billion, an increase of 8.2% compared to the end of 2023;
The tier 1 capital ratio was 11.41%;
The Bank's Board of Directors decided to distribute a dividend in the amount of NIS 248 million, representing 40% of the net income.

Financial Results of the Third Quarter 2024

Net profit for the First International Bank Group was NIS 620 million in the third quarter of 2024, an increase of 36.3 % compared to the comparative quarter in the previous year. Return on equity was 19.4%.

The net profit for the first nine months of the year was NIS 1,798 million, an increase of 7.5% compared to the comparative period in the previous year. The return on equity was 19.4%.

Expense for credit losses was NIS 22 million in the third quarter, amounting to 0.07% of the average balance of credit to the public. Income for credit losses amounted to NIS 51 million in the first nine months of the year, primarily from debt recovery. In the corresponding period of last year, expenses of NIS 336 million were recorded which was due to an increase in collective provisions because of concerns over macroeconomic impacts, amid uncertainty.

High-quality credit portfolio: the NPL (non-performing loan) ratio remained stable and reached 0.57% at the end of the third quarter. This reflects the quality of the credit portfolio, (the balance of debts not accruing or overdue by 90 days or more out of the total credit to the public). The total coverage ratio (the ratio of the total credit loss provisions to the total credit to the public) stood at 1.41%, compared to 1.37% in the comparative period last year.

The operating and other expenses were NIS 2,240 million in the first nine months of the year, an increase of 2% compared to the comparative period in the previous year, mainly due to an increase in other expenses: IT-related, donations, telecommunications and advertising. The efficiency ratio stood at 44.5%.

Credit to the public amounted to NIS 126.4 billion, an increase of 6% compared to the end of 2023. There was an increase in the credit of 3.5% in the third quarter, compared to the second quarter of the year.

Deposits by the public amounted to NIS 213 billion, an increase of 11.4% compared to the end of 2023, and 4.3% compared to the second quarter.

The total customers' assets portfolio increased by 26% year-over-year and by 19% compared to the end of 2023, to approximately 800 billion.

Equity attributed to shareholders in the Bank increased to NIS 13 billion, an increase of 8.2% compared to the end of 2023. The tier 1 capital ratio reached 11.41%, approximately -2.2% above the regulatory requirement, reflecting the highest capital surplus in the Israeli banking system. The liquidity coverage ratio is high and stands at 171%.

Considering the requests of the Banking Supervisor regarding capital planning and profits distribution policies, the Bank's Board of Directors decided to approve the distribution of a cash dividend to the shareholders for NIS 248 million representing 40% of the net income. The Bank's Board of Directors will continue to review the implementation of the Bank's dividend distribution policy in light of ongoing developments and their impact on the Israeli economy and on the Bank.

Management Comment

Eli Cohen, CEO of First International Bank, commented: ,"The Bank's reports reflect a growth trend both on the passive side, including deposits and securities of the public, which reached a record NIS 800 billion, and also on the active side, with a considerable increase in the credit portfolio, which has been achieved while maintaining the quality of the underwriting and portfolio diversification.

"Amid economic uncertainty and the ongoing multi-front war in Israel, the First International Bank maintained high capital and liquidity cushions, ensuring resilience and our ability to continue supporting our customers. The Bank is continuing to provide benefits and relief measures for customers to help them navigate the current challenging period.

"I am proud to say that the First International Bank's customers are the most satisfied among bank customers in Israel, reporting high satisfaction with the Bank, the professionalism of its services and their willingness to recommend the bank to their friends. This is evidenced via customer surveys, including the recent Marketest survey. This reflects the high quality service and competitiveness of the First International Bank, as well as the professionalism and the dedication of our Group's employees, all of whom have contributed to the achievement.

"We recently announced a number of management changes at the Bank: Vered Golan was appointed to the position of Head of the Corporate Division, Dr. Moriah Hoftman-Doron was appointed to the position of Chief Legal Counsel, and Liora Shechter was appointed CEO of Mataf. I wish considerable success to the new members of our management team."

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES
Principal financial ratios	For the nine months ended September 30,		For the year ended December 31,
	2024	2023	2023
			in %
Principal execution indices
Return on equity attributed to shareholders of the Bank⁽¹⁾	19.4	20.5	19.7
Return on average assets⁽¹⁾	1.05	1.10	1.06
Ratio of equity capital tier 1	11.41	10.84	11.35
Leverage ratio	5.17	5.30	5.26
Liquidity coverage ratio	171	142	156
Net stable funding ratio	142	138	146
Ratio of total income to average assets⁽¹⁾	2.9	3.3	3.2
Ratio of interest income, net to average assets ⁽¹⁾	2.1	2.5	2.4
Ratio of fees to average assets⁽¹⁾	0.7	0.7	0.7
Efficiency ratio	44.5	43.6	43.5
Credit quality indices
Ratio of provision for credit losses to credit to the public	1.29	1.25	1.36
Ratio of total provision for credit losses⁽²⁾ to credit to the public	1.41	1.37	1.50
Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public	0.57	0.49	0.60
Ratio of provision for credit losses to total non-accruing credit to the public	230.5	263.8	234.5
Ratio of net write-offs to average total credit to the public⁽¹⁾	(0.06)	-	0.03
Ratio of expenses (income) for credit losses to average total credit to the public ⁽¹⁾	(0.06)	0.38	0.42

Principal data from the statement of income		For the nine months ended September 30,
		2024	2023
			NIS million
Net profit attributed to shareholders of the Bank		1,798	1,673
Interest Income, net		3,601	3,820
Expenses (income) from credit losses		(51)	336
Total non-Interest income		1,436	1,216
Of which: Fees		1,123	1,131
Total operating and other expenses		2,240	2,197
Of which: Salaries and related expenses		1,302	1,353
Primary net profit per share of NIS 0.05 par value (NIS)		17.92	16.67

Principal data from the balance sheet	30.9.24	30.9.23	31.12.23
			NIS million
Total assets	242,512	210,673	221,593
of which: Cash and deposits with banks	81,440	61,659	68,866
Securities	28,860	22,043	26,985
Credit to the public, net	124,749	118,577	117,622
Total liabilities	228,823	198,542	208,947
of which: Deposits from the public	212,907	181,274	191,125
Deposits from banks	2,631	3,824	4,314
Bonds and subordinated capital notes	4,474	4,751	4,767
Capital attributed to the shareholders of the Bank	13,066	11,583	12,071

Additional data	30.9.24	30.9.23	31.12.23
Share price (0.01 NIS)	15,410	16,360	14,990
Dividend per share (0.01 NIS)	739	706	795
(1) Annualized.
(2) Including provision in respect of off-balance sheet credit instruments.

CONSOLIDATED STATEMENT OF INCOME
(NIS million)
	For the three months ended September 30		For the nine months ended September 30		For the year Ended December 31
	2024	2023	2024	2023	2023
	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(audited)
Interest Income	2,955	2,590	8,410	7,289	9,850
Interest Expenses	1,690	1,363	4,809	3,469	4,884
Interest Income, net	1,265	1,227	3,601	3,820	4,966
Expenses (income) from credit losses	22	165	(51)	336	502
Net Interest Income after expenses from credit losses	1,243	1,062	3,652	3,484	4,464
Non- Interest Income
Non-Interest Financing income	153	(1)	300	78	142
Fees	396	375	1,123	1,131	1,502
Other income	3	-	13	7	8
Total non- Interest income	552	374	1,436	1,216	1,652
Operating and other expenses
Salaries and related expenses	430	438	1,302	1,353	1,746
Maintenance and depreciation of premises and equipment	91	89	264	256	341
Amortizations and impairment of intangible assets	36	31	99	91	122
Other expenses	220	175	575	497	668
Total operating and other expenses	777	733	2,240	2,197	2,877
Profit before taxes	1,018	703	2,848	2,503	3,239
Provision for taxes on profit	390	247	1,033	869	1,090
Profit after taxes	628	456	1,815	1,634	2,149
The bank's share in profit of equity-basis investee, after taxes	22	21	62	105	113
Net profit:
Before attribution to non‑controlling interests	650	477	1,877	1,739	2,262
Attributed to non‑controlling interests	(30)	(22)	(79)	(66)	(90)
Attributed to shareholders of the Bank	620	455	1,798	1,673	2,172

	NIS
Primary profit per share attributed to the shareholders of the Bank
Net profit per share of NIS 0.05 par value	6.18	4.53	17.92	16.67	21.65

STATEMENT OF COMPREHENSIVE INCOME
(NIS million)
	For the three months ended September 30		For the nine months ended September 30		For the year Ended December 31
	2024	2023	2024	2023	2023
	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(audited)
Net profit before attribution to non‑controlling interests	650	477	1,877	1,739	2,262
Net profit attributed to non‑controlling interests	(30)	(22)	(79)	(66)	(90)
Net profit attributed to the shareholders of the Bank	620	455	1,798	1,673	2,172
Other comprehensive income (loss) before taxes:
Adjustments of available for sale bonds to fair value, net	129	52	(115)	78	213
Adjustments of liabilities in respect of employee benefits⁽¹⁾	(2)	34	10	37	25
Other comprehensive income (loss) before taxes	127	86	(105)	115	238
Related tax effect	(49)	(29)	41	(40)	(81)
Other comprehensive income (loss) before attribution to non‑controlling interests, after taxes	78	57	(64)	75	157
Less other comprehensive income (loss) attributed to non‑controlling interests	3	1	(2)	6	9
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes	75	56	(62)	69	148
Comprehensive income before attribution to non‑controlling interests	728	534	1,813	1,814	2,419
Comprehensive income attributed to non‑controlling interests	(33)	(23)	(77)	(72)	(99)
Comprehensive income attributed to the shareholders of the Bank	695	511	1,736	1,742	2,320
(1) Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits pension plans and deduction of amounts recorded in the past in other comprehensive income.

CONSOLIDATED BALANCE SHEET
(NIS million)
	September 30,		December 31,
	2024	2023	2023
	(unaudited)	(unaudited)	(audited)
Assets
Cash and deposits with banks	81,440	61,659	68,866
Securities	28,860	22,043	26,985
Securities borrowed	147	155	57
Credit to the public	126,374	120,073	119,240
Provision for Credit losses	(1,625)	(1,496)	(1,618)
Credit to the public, net	124,749	118,577	117,622
Credit to the government	1,611	1,015	1,055
Investment in investee company	854	776	786
Buildings and equipment	852	871	877
Intangible assets	350	305	328
Assets in respect of derivative instruments	2,308	3,940	3,651
Other assets⁽²⁾	1,341	1,332	1,366
Total assets	242,512	210,673	221,593
Liabilities and Capital
Deposits from the public	212,907	181,274	191,125
Deposits from banks	2,631	3,824	4,314
Deposits from the Government	689	665	750
Securities lent or sold under agreements to repurchase	1,542	-	-
Bonds and subordinated capital notes	4,474	4,751	4,767
Liabilities in respect of derivative instruments	2,086	3,496	3,784
Other liabilities⁽¹⁾⁽³⁾	4,494	4,532	4,207
Total liabilities	228,823	198,542	208,947
Shareholders' equity	13,066	11,583	12,071
Non-controlling interests	623	548	575
Total capital	13,689	12,131	12,646
Total liabilities and capital	242,512	210,673	221,593
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 160 million and NIS 150 million and NIS 165 million at 30.9.24, 30.9.23 and 31.12.23, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 16 million and NIS 13 million and NIS 10 million at 30.9.24, 30.9.23 and 31.12.23, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 48 million and NIS 26 million and NIS 11 million at 30.9.24, 30.9.23 and 31.12.23, respectively.

STATEMENT OF CHANGES IN EQUITY
(NIS million)
	For the three months ended September 30, 2024 (unaudited)
	Share capital and premium ⁽¹⁾	Accumulated other comprehensive income (loss)	Retained earnings ⁽²⁾	Total share-holders' equity	Non- controlling interests	Total capital
Balance as of June 30, 2024	927	(292)	11,980	12,615	590	13,205
Net profit for the period	-	-	620	620	30	650
Dividend	-	-	(244)	(244)	-	(244)
Other comprehensive income, after tax effect	-	75	-	75	3	78
Balance as at September 30, 2024	927	(217)	12,356	13,066	623	13,689

	For the three months ended September 30, 2023 (unaudited)
	Share capital and premium ⁽¹⁾	Accumulated other comprehensive income (loss)	Retained earnings ⁽²⁾	Total share-holders' equity	Non- controlling interests	Total capital
Balance as of June 30, 2023	927	(290)	10,655	11,292	525	11,817
Net profit for the period	-	-	455	455	22	477
Dividend	-	-	(220)	(220)	-	(220)
Other comprehensive income, after tax effect	-	56	-	56	1	57
Balance as at September 30, 2023	927	(234)	10,890	11,583	548	12,131

	For the nine months ended September 30, 2024 (unaudited)
	Share capital and premium ⁽¹⁾	Accumulated other comprehensive loss	Retained earnings ⁽²⁾	Total share-holders' equity	Non- controlling interests	Total capital
Balance as at December 31, 2023 (audited)	927	(155)	11,299	12,071	575	12,646
Net profit for the period	-	-	1,798	1,798	79	1,877
Dividend	-	-	(741)	(741)	(29)	(770)
Other comprehensive loss, after tax effect	-	(62)	-	(62)	(2)	(64)
Balance as at September 30, 2024	927	(217)	12,356	13,066	623	13,689

	For the nine months ended September 30, 2023 (unaudited)
	Share capital and premium ⁽¹⁾	Accumulated other comprehensive income (loss)	Retained earnings ⁽²⁾	Total share-holders' equity	Non- controlling interests	Total capital
Balance as at December 31, 2022 (audited)	927	(303)	9,935	10,559	476	11,035
Adjustment of the opening balance, net of tax, due to the effect of initial implementation in investee company*	-	-	(10)	(10)	-	(10)
Adjusted balance at January 1, 2023, following initial implementation	927	(303)	9,925	10,549	476	11,025
Net profit for the period	-	-	1,673	1,673	66	1,739
Dividend	-	-	(708)	(708)	-	(708)
Other comprehensive income, after tax effect	-	69	-	69	6	75
Balance as at September 30, 2023	927	(234)	10,890	11,583	548	12,131

STATEMENT OF CHANGES IN EQUITY (CONT'D)
(NIS million)
	For the year ended December 31, 2023 (audited)
	Share capital and premium⁽¹⁾	Accumulated other comprehensive income (loss)	Retained earnings⁽²⁾	Total	Non- controlling interests	Total capital
Balance as at December 31, 2022	927	(303)	9,935	10,559	476	11,035
Adjustment of the opening balance, net of tax, due to the effect of initial implementation in investee company *	-	-	(10)	(10)	-	(10)
Adjusted balance at January 1, 2023, following initial implementation	927	(303)	9,925	10,549	476	11,025
Net profit for the year	-	-	2,172	2,172	90	2,262
Dividend	-	-	(798)	(798)	-	(798)
Other comprehensive income, after tax effect	-	148	-	148	9	157
Balance as at December 31, 2023	927	(155)	11,299	12,071	575	12,646
* Cumulative effect of the initial implementation of US accounting principles in the matter of financial instruments - credit losses (ASC-326).
(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.