Leumi Reports 10.2% Return on Equity in the First Nine Months of 2018; 11.2% Return on Equity in Q3 2018

TEL AVIV, Israel, Nov. 13, 2018 /PRNewswire/ --

    --  Net income in the first nine months of 2018 totaled NIS 2,569 million
        ($708 million), compared with NIS 2,318 million ($639 million) in the
        same period last year - an approximate 11% year-over-year increase. Net
        income in the third quarter of 2018 totaled NIS 936 million ($258
        million) compared to NIS 820 million ($226 million) in the same quarter
        last year - a 14% increase.
    --  Return on equity in the first nine months of 2018 was 10.2%, compared
        with 9.7% in the same period last year. Return on equity in the third
        quarter of 2018 was 11.2%, compared with 10.3% in the same period last
        year.
    --  Continued improvement in the efficiency ratio - A 59.8% ratio in the
        first nine months of 2018, compared with 62.9% in the same period last
        year; A 55.8% ratio in the third quarter of 2018, compared with 64.4% in
        the same period last year.
    --  Leumi  (TASE: LUMI) continues to lead the Israeli banking system in
        credit portfolio quality - Credit loss expenses in the first nine months
        2018 reflected 0.15% of the Bank's loan portfolio.
    --  Common Equity Tier 1 Capital Ratio as at September 30, 2018 was 11.25%,
        and the total capital ratio reached 14.69%.
    --  The Bank will distribute a NIS 375 million ($103 million) dividend in
        respect of its third quarter earnings. The total dividend for the first
        nine months of 2018 was NIS 1,028 million ($283 million).
    --  Share buyback - In late May 2018, the Bank began executing a share
        buyback plan totaling up to NIS 700 million ($193 million). Prior to the
        financial statements' approval date, the Bank had purchased shares in
        the amount of NIS 642 million ($177 million).
    --  Net interest income in the first nine months of 2018 was up by NIS 660
        million ($182 million), an 11.1% year-over-year increase. Net interest
        income in the third quarter of 2018 was up by 14.5% compared with the
        same period last year.
    --  Total operating expenses in the first nine months of 2018 increased by
        NIS 70 million ($19 million) compared with the same period last year.
        Most of the increase arose from the bonus granted to employees during
        the second quarter of the year, in respect of structural changes.
        Expenses in the third quarter of 2018 were similar to those in the same
        period last year.

Continued implementation of the Bank's strategy:

    --  Leumi continues to lead the digital banking field in Israel - The Bank
        has recently launched VIDEA, a new portfolio management company which
        allows customers of all banks to manage an online portfolio through an
        advanced digital platform, while offering some of the lowest management
        fees in the Israeli market. In addition, Leumi continues developing
        innovative and ground-breaking products, such as 'Digital Mortgage' and
        additional tools enabling smart financial management.
    --  Establishment of an Operations Division - The Bank continues to promote
        the launch of a new Operations Division, scheduled for 2019. The
        division will concentrate all operational activities under a single
        roof, with the aim of increasing effectiveness, streamlining processes,
        mitigating risk and boosting efficiency.
    --  Credit growth - The Bank continues to pursue its selective credit
        growth, with a strict risk management policy and adherence to a high
        quality portfolio.

Development of Balance Sheet Line Items:

    --  Leumi Group's total shareholders' equity as at September 30, 2018
        totaled NIS 34.8 billion ($9.6 billion), compared with NIS 32.8 billion
        ($9.0 billion) as at September 30, 2017 (a 6% increase).
    --  Leverage ratio as at September 30, 2018 was 7.05%, compared with the
        minimum threshold of 6% required by the Bank of Israel.
    --  Liquidity coverage ratio as at September 30, 2018 was 121%, compared
        with the minimum threshold of 100% required by the Bank of Israel.
    --  Net loans to the public as at September 30, 2018 totaled NIS 276.0
        billion ($76.1 billion), compared with NIS 266.4 billion ($73.5 billion)
        as at September 30, 2017 (a 3.6% increase).
    --  Deposits from the public as at September 30, 2018 reached NIS 358.9
        billion ($99.0 billion), compared with NIS 350.2 billion ($96.6 billion)
        as at September 30, 2017 (a 2.5% increase).

Leumi Group - Key Financial Statement Figures

Profit and Profitability (in NIS millions)


                                             For the nine months ended        December 31 
     2017

                                                     September 30



        
            
             2018   2017                         Change in %

                            ---

        Net interest
         income                  6,616  5,956                            11.1                     8,046

    ---

        Credit loss
         expenses                  314    146    
                              +                      172

    ---

        Noninterest income       3,786  3,813                           (0.7)                    5,428

    ---

        Operating and
         other expenses          6,216  6,146                             1.1                     8,501

    ---

        Profit before
         taxes                   3,872  3,477                            11.4                     4,801

    ---

        Provision for tax        1,298  1,220                             6.4                     1,692

    ---

        Profit after tax         2,574  2,257                            14.0                     3,109

    ---

        The Bank's share
         in profits of
         companies
         included on
         equity basis               47     85                          (44.7)                       92

    ---

        Net profit
         attributed to
         non-controlling
         interests                (52)  (24)                                                    (29)

    ---

        Net income
         attributed to
         shareholders of
         the banking
         corporation             2,569  2,318                            10.8                     3,172

    ---

        Return on equity
         (%)                    10.2%  9.7%                                                    9.8%

    ---

        Net income per
         share (NIS)              1.69   1.52                                                     2.08

    ---

Development of Balance Sheet Items (in NIS millions)


                                  September 30   December 31



         
              
            2018           2017            Change in %    2017      Change in %

                      ---

        Net credit to the
         public                      275,990 (a)     266,358          3.6   267,952              3.0

    ---

        Deposits of the
         public                          358,875      350,201          2.5   362,478            (1.0)

    ---

        Shareholders' equity              34,759       32,793          6.0    33,167              4.8

    ---

        Total assets                     450,674      440,051          2.4   450,838

    ---

Principal Financial Ratios (%)


                                September 30          December 31
                                                          2017




       
                2018                        2017

         ---

        Net credit to
         the public to
         total assets     61.2
             (a)                  60.5  59.4

    ---

        Deposits of the
         public to total
         assets                                  79.6         79.6  80.4

    ---

        Total equity to
         risk assets                            14.69        15.05 14.99

    ---

        Total Tier 1
         equity to risk
         assets                                 11.25        11.35 11.43

    ---

        Leverage ratio                           7.05         7.03  6.94

    ---

        Liquidity
         coverage ratio                           121          122   122

    ---

        Expenses in
         respect of
         credit losses
         out of net
         credit to the
         public                              0.15 (a)        0.07  0.06

    ---

        Total operating
         and other
         expenses to
         total income
         (efficiency
         ratio)                                  59.8         62.9  63.1

    ---

        Net interest
         margin (NIM)                            2.18         2.03  2.05

    ---

a) Including credit by Leumi Card which is classified as a held-for-sale asset as of March 31, 2018.

The data in this press release has been converted into US dollars solely for convenience purposes, at the representative exchange rate published by the Bank of Israel on September 30, 2018, NIS 3.627.

Conference Call Details:

A conference call to discuss the results will be held today at 5 PM (Israel); 3 PM (UK); 10:00 AM (ET).

It is recommended to connect to the link at least 10 minutes prior to the beginning of the call. An archived recording will be available on the Leumi website one business day after the call ends.

Conference Call Dial-in Details (no passcode required):

Israel: 03-9180644
UK: 0-800-917-9141
US & Canada: 1-888-281-1167
All other locations: +972-3-918-0644

The conference call does not replace the latest periodic/quarterly reports in which full information is contained, including forward-looking information, as defined in the Israeli Securities Law, and set out in the aforementioned reports.

For more information visit http://www.leumi.co.il or contact Daphna Golden, VP, Head of Investor Relations, at Daphna.Golden@bankleumi.co.il

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SOURCE Bank Leumi