The First International Bank Reports its Financial Results for the First Quarter of 2024
Results reflect high profitability while maintaining financial stability
TEL AVIV, Israel, May 28, 2024 /PRNewswire/ — First International Bank of Israel (TASE: FIBI) one of Israel’s major banking groups, today announced its results for the first quarter ended March 31, 2024.
Financial Highlights
Net income of NIS 569 million in the first quarter of 2024The Return on equity was 18.7%Deposits by the public increased by 2.9% compared to the end of 2023 and by 13.4% compared to the comparative period in the previous yearThe portfolio of customers’ assets increased by 7.2% compared to the end of 2023 and by 23.4% compared to the first quarter of 2023, reaching approximately NIS 720 billionEquity attributed to shareholders of the Bank increased by 13.5% compared to the end of the first quarter of 2023The tier 1 shareholders’ equity was 11.78% and the liquidity cover ratio was 161%The Bank’s Board of Directors decided to distribute a dividend, amounting to 40% of the net income for the quarter
Financial Results of the First Quarter 2024
Net income for the First International Bank was NIS 569 million in the first quarter of 2024, an increase of 14% compared to the fourth quarter of 2023, and a decrease of 9.8 % compared to the first quarter of 2023. Return on equity was 18.7%. The income for the first quarter included a tax benefit of NIS 49 million in respect of prior years. Excluding the tax benefit, the return on equity amounted to 17.1%.
Total revenue amounted to NIS 1,581 million in the first quarter of 2024, a decrease of 7% compared to the first quarter of last year. Financing income from operating activities amounted to NIS 1,164 million in the first quarter of 2024, compared to NIS 1,332 million in the first quarter of last year. The decrease was due, among other impacts, to the transition to depositing in interest-bearing accounts rather than non-interest bearing credit balances in current accounts, as well as changes in the consumer price index.
Given the quality of the credit portfolio, as well as the building-up of provisions in recent quarters, total income from credit losses amounted to NIS 2 million in the first quarter of 2024, compared to expenses of NIS 72 million in the first quarter of 2023. The specific net income from credit losses amounted to NIS 6 million in the first three months of the year, compared to NIS 14 million in the first quarter of 2023. The collective expense for credit losses amounted to NIS 4 million in the first three months of the year, compared to NIS 86 million in the first quarter of the previous year. The decrease in the collective expense for credit losses compared to the comparative period last year was due to an improvement in existing and forecast macroeconomic indices during the first quarter of the current year.
The ratio of high quality credit to non-performing loans (NPL) remained stable during the first quarter of 2024 and stood at 0.6%. The ratio indicates the quality of the credit portfolio (the balance of non-accrual loans or loans in arrears of 90 days or more) as a percentage of total credit to the public. The overall coverage ratio (the percentage of the total allowance for credit losses to the total amount of the credit to the public) stood at 1.53%.
Operating and other expenses amounted to NIS 731 million in the first quarter of 2024, an increase of 1% compared to the first quarter of 2023. Salaries and related expenses decreased by 1.6% and amounted to NIS 442 million, with the decrease primarily due to a reduction in the provision for bonuses, which was, among other reasons, as a result of the signing of labor agreements for the year 2023 – 2026, in the first quarter of last year. The decrease was partially offset by an increase in current salaries.
The efficiency ratio was 46.2% in the first quarter of 2024, compared to 43.5 % in the first quarter of 2023.
The provision for taxes on income amounted to NIS 279 million in the first three months of the year, compared to NIS 315 million in the first three months of the previous year. The effective tax rate amounted to 32.7%, compared to 34.8% in the comparative period of last year, and was impacted by the tax benefit of NIS 49 million in respect of prior years, and an increase in the statutory tax rate.
Credit to the public amounted to NIS 116,816 million, a decrease of 2% compared to the end of 2023, and of 2.5% compared the end of the first quarter of last year. The decrease compared to the end of 2023 was primarily due to a decrease in credit to large businesses, among others, in the capital markets sector. In other sectors, there were increases in credit recorded: credit to households: (1.4%), housing loans, small businesses and medium-sized businesses.
Deposits by the public amounted to NIS 196,615 million, an increase of 2.9% compared to the end of 2023 and an increase of 13.4% compared to the end of the first quarter of last year. The total customer asset portfolio amounted to NIS 720 billion and grew by 7.2% compared to the end of 2023 and grew by 23.4% compared to the end of the first quarter of 2023.
The equity attributed to the Bank’s shareholders increased to NIS 12,355 million, an increase of 2.4% compared to the end of 2023 and of 13.5% compared to the end of the first quarter of the previous year. The tier 1 shareholders’ equity ratio increased to 11.78%, above the required regulatory ratio level. The liquidity coverage ratio rose to 161%, compared to 156% at the end of 2023.
Taking into consideration the Supervisor of Banks’ directives regarding Capital Planning and Profits Distribution Policies, the Bank’s Board of Directors decided to approve the distribution of a cash dividend at a rate of 40% of equity. The Bank’s Board of Directors will continue to implement the Bank’s dividend distribution policy, monitoring ongoing developments and their impact on the Israeli economy and on the bank.
Eli Cohen, CEO of First International Bank commented, “The State of Israel is going through a complex and ongoing crisis, which combines security-related, social, economic and diplomatic aspects. As a stable bank, First International Bank will continue to support and stand by its customers, assist them and innovate, providing relevant and innovative value-propositions.”
“First International Bank entered the crisis well-prepared, which has been apparent, among other aspects, due to its high capital and liquidity cushions that are among the highest in the Israeli banking system as well as a high-quality and diversified credit portfolio. All these are the result of the Bank’s cautious and responsible policy, and focused risk management, as reflected in the Bank’s results and achievements, as demonstrated in the results for the first quarter of 2024.”
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES
Principal financial ratios
For the three months
ended March 31,
For the year
ended December 31,
2024
2023
2023
Percent
Principal execution indices
Return on equity attributed to shareholders of the Bank(1)
18.7
23.6
19.7
Return on average assets(1)
1.03
1.28
1.06
Ratio of equity capital tier 1
11.78
10.55
11.35
Leverage ratio
5.27
5.15
5.26
Liquidity coverage ratio
161
131
156
Net stable funding ratio
150
133
146
Ratio of total income to average assets(1)
2.9
3.5
3.2
Ratio of interest income, net to average assets (1)
2.0
2.6
2.4
Ratio of fees to average assets (1)
0.7
0.8
0.7
Efficiency ratio
46.2
42.6
43.5
Credit quality indices
Ratio of provision for credit losses to credit to the public
1.38
1.06
1.36
Ratio of total provision for credit losses (2) to credit to the public
1.53
1.17
1.50
Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public
0.60
0.47
0.60
Ratio of provision for credit losses to total non-accruing credit to the public
236.1
232.5
234.5
Ratio of net write-offs to average total credit to the public (1)
(0.02)
(0.04)
0.03
Ratio of expenses (income) for credit losses to average total credit to the public (1)
(0.01)
0.25
0.42
Principal data from the statement of income
For the three months
ended March 31,
2024
2023
NIS million
Net profit attributed to shareholders of the Bank
569
631
Interest Income, net
1,115
1,275
Expenses (income) from credit losses
(2)
72
Total non-Interest income
466
425
Of which: Fees
365
388
Total operating and other expenses
731
724
Of which: Salaries and related expenses
442
449
Primary net profit per share of NIS 0.05 par value (NIS)
5.67
6.29
Principal data from the balance sheet
31.3.24
31.3.23
31.12.23
NIS million
Total assets
225,941
204,312
221,593
of which: Cash and deposits with banks
76,731
57,763
68,866
Securities
26,375
19,756
26,985
Credit to the public, net
115,199
118,502
117,622
Total liabilities
212,989
192,923
208,947
of which: Deposits from the public
196,615
173,390
191,125
Deposits from banks
3,586
5,481
4,314
Bonds and subordinated capital notes
4,736
4,770
4,767
Capital attributed to the shareholders of the Bank
12,355
10,888
12,071
Additional data
31.3.24
31.3.23
31.12.23
Share price (0.01 NIS)
15,440
12,650
14,990
Dividend per share (0.01 NIS)
268
267
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 March 31
For the year Ended
December 31
2024
2023
2023
(unaudited)
(unaudited)
(audited)
Interest Income
2,576
2,176
9,850
Interest Expenses
1,461
901
4,884
Interest Income, net
1,115
1,275
4,966
Expenses (income) from credit losses
(2)
72
502
Net Interest Income after expenses from credit losses
1,117
1,203
4,464
Non- Interest Income
Non-Interest Financing income
100
36
142
Fees
365
388
1,502
Other income
1
1
8
Total non- Interest income
466
425
1,652
Operating and other expenses
Salaries and related expenses
442
449
1,746
Maintenance and depreciation of premises and equipment
87
84
341
Amortizations and impairment of intangible assets
31
30
122
Other expenses
171
161
668
Total operating and other expenses
731
724
2,877
Profit before taxes
852
904
3,239
Provision for taxes on profit
279
315
1,090
Profit after taxes
573
589
2,149
The bank’s share in profit of equity-basis investee, after taxes
18
65
113
Net profit:
Before attribution to non–controlling interests
591
654
2,262
Attributed to non–controlling interests
(22)
(23)
(90)
Attributed to shareholders of the Bank
569
631
2,172
NIS
Primary profit per share attributed to the shareholders of the Bank
Net profit per share of NIS 0.05 par value
5.67
6.29
21.65
The notes to the financial statements are an integral part thereof.
STATEMENT OF COMPREHENSIVE INCOME
(NIS million)
For the three months
ended March 31
For the year Ended
December 31
2024
2023
2023
(unaudited)
(unaudited)
(audited)
Net profit before attribution to non–controlling interests
591
654
2,262
Net profit attributed to non–controlling interests
(22)
(23)
(90)
Net profit attributed to the shareholders of the Bank
569
631
2,172
Other comprehensive income (loss) before taxes:
Adjustments of available for sale bonds to fair value, net
(44)
(30)
213
Adjustments of liabilities in respect of employee benefits(1)
11
(3)
25
Other comprehensive income (loss) before taxes
(33)
(33)
238
Related tax effect
17
11
(81)
Other comprehensive income (loss) before attribution to non–controlling interests, after taxes
(16)
(22)
157
Less other comprehensive income attributed to non–controlling interests
–
2
9
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes
(16)
(24)
148
Comprehensive income before attribution to non–controlling interests
575
632
2,419
Comprehensive income attributed to non–controlling interests
(22)
(25)
(99)
Comprehensive income attributed to the shareholders of the Bank
553
607
2,320
(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)
March 31,
December 31,
2024
2023
2023
(unaudited)
(unaudited)
(audited)
Assets
Cash and deposits with banks
76,731
57,763
68,866
Securities
26,375
19,756
26,985
Securities which were borrowed
2
45
57
Credit to the public
116,816
119,769
119,240
Provision for Credit losses
(1,617)
(1,267)
(1,618)
Credit to the public, net
115,199
118,502
117,622
Credit to the government
965
935
1,055
Investment in investee company
800
730
786
Premises and equipment
867
899
877
Intangible assets
325
307
328
Assets in respect of derivative instruments
3,324
4,047
3,651
Other assets(2)
1,353
1,328
1,366
Total assets
225,941
204,312
221,593
Liabilities and Shareholders’ Equity
Deposits from the public
196,615
173,390
191,125
Deposits from banks
3,586
5,481
4,314
Deposits from the Government
710
828
750
Bonds and subordinated capital notes
4,736
4,770
4,767
Liabilities in respect of derivative instruments
3,085
3,572
3,784
Other liabilities(1)(3)
4,257
4,882
4,207
Total liabilities
212,989
192,923
208,947
Capital attributed to the shareholders of the Bank
12,355
10,888
12,071
Non-controlling interests
597
501
575
Total equity
12,952
11,389
12,646
Total liabilities and shareholders’ equity
225,941
204,312
221,593
(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 170 million and NIS 129 million and NIS 165 million at 31.3.24, 31.3.23 and 31.12.23, respectively.
(2) Of which: other assets measured at fair value in the amount of NIS 5 million and NIS 15 million and NIS 10 million at 31.3.24, 31.3.23 and 31.12.23, respectively.
(3) Of which: other liabilities measured at fair value in the amount of NIS 5 million and NIS 21 million and NIS 11 million at 31.3.24, 31.3.23 and 31.12.23, respectively.
STATEMENT OF CHANGES IN EQUITY
(NIS million)
For the three months ended March 31, 2024 (unaudited)
Share capital
and premium (1)
Accumulated other
comprehensive loss
Retained
earnings (2)
Total share-holders’
equity
Non- controlling
interests
Total
equity
Balance as at December 31, 2023 (audited)
927
(155)
11,299
12,071
575
12,646
Net profit for the period
–
–
569
569
22
591
Dividend
–
–
(269)
(269)
–
(269)
Other comprehensive loss, after tax effect
–
(16)
–
(16)
–
(16)
Balance as at March 31, 2024
927
(171)
11,599
12,355
597
12,952
For the three months ended March 31, 2023 (unaudited)
Share capital
and premium (1)
Accumulated other
comprehensive loss
Retained
earnings (2)
Total share-holders’
equity
Non- controlling
interests
Total
equity
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*
–
–
(10)
(10)
–
(10)
Adjusted balance at January 1, 2023, f
ollowing initial implementation
927
(303)
9,925
10,549
476
11,025
Net profit for the period
–
–
631
631
23
654
Dividend
–
–
(268)
(268)
–
(268)
Other comprehensive income (loss), after tax effect
–
(24)
–
(24)
2
(22)
Balance as at March 31, 2023
927
(327)
10,288
10,888
501
11,389
For year ended December 31, 2023 (audited)
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 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*
–
–
(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.
Contact:
Dafna Zucker
First International Bank of Israel
[email protected]
+972-3-519-6224
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SOURCE First International Bank of Israel