First International Bank of Israel Presents First Quarter 2022 Results

Rhea-AI Summary

First International Bank of Israel announced its Q1 2022 results with a net profit of NIS 322 million, reflecting a 5.9% increase year-over-year. The return on equity is at 13%, while credit to the public rose by 14.7% to NIS 107,342 million. A dividend distribution of NIS 160 million was approved, amounting to 50% of net income. Tier I equity capital ratio stands at 10.79%, exceeding regulatory requirements. The bank noted no credit loss expenses during the quarter, with a 22% drop in problematic credit.

Positive

• Net profit of NIS 322 million, up 5.9% YoY.
• Return on equity at 13%.
• 14.7% growth in credit to the public YoY.
• Dividend distribution of 50% of net income approved.
• Tier I equity capital ratio at 10.79%, highest gap among Israeli banks.
• No credit loss expense recorded, compared to NIS 9 million income last year.
• Problematic credit value declined by 22% YoY.

Negative

• Operating expenses increased by 4.3% YoY to NIS 684 million.
• Equity attributed to shareholders grew only 3.7% YoY.

TEL AVIV, Israel, May 24, 2022 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the first quarter of 2022, ended March 31, 2022.

Financial Highlights for the First Quarter of 2022

• Net profit of NIS 322 million- Growth of 5.9% compared to the corresponding quarter last year;
• Return on equity of 13%;
• Growth of 5% in credit to the public and growth of 14.7% in the past year;
• Ratio of tier I equity capital to risk components of 10.79%, 1.54% higher than the required regulatory ratio - the highest gap among the banks in Israel; the excess capital enables growth in credit and  for ongoing business development;
• The Board of Directors approved a dividend distribution amounting to 50% of net income.

Profitability

Net profit of the First International Bank Group in the first quarter of 2022, amounted to NIS 322 million, as compared to NIS 304 million in the corresponding first quarter of 2021, an increase of 5.9%. Return on equity reached 13%.

Growth and Efficiency

The First International Bank continues its consistent trend of growth, which is demonstrated across all core areas of the Bank's operations.

Revenue in the first quarter increased by 5.3%, compared to the first quarter of last year. Net interest income increased by 11% and commission income increased by 6.4%.

Credit to the public increased by 14.7% compared with that of the first quarter of last year, amounting to a total of NIS 107,342 million. In the first quarter of 2022, credit to the public grew by 5%. The growth in credit was across all fields of operation: compared with that of the first quarter of last year, the middle market business segment grew by 22.5%, the small business segment grew by 16.7%, the large business segment grew by 20.5%, credit to households grew by 6%, and the residential loan segment grew by 14.7%.

The customer's assets portfolio (average) increase by NIS 47 billion, representing growth of 8.5% compared with that of the first quarter of last year and amounted to NIS 596 billion.

No credit loss expense was recorded in the first quarter of 2022. This compares to an credit loss income of NIS 9 million, in the first quarter of last year. The total value of problematic credit declined by 22% compared with that of the first quarter of last year and it declined by 12.4% as compared to that of year-end 2021.

The efficiency ratio amounted to 58.5% in the first quarter of 2022. This demonstrates an improvement compared with 59.0% as of the corresponding period last year.

Operating and other expenses in the first quarter of 2022 amounted to NIS 684 million, a growth of 4.3% as compared to first quarter of last year. This growth is due to the rise in payroll expenses due to timing differences in the components payroll which are of a fluctuating nature, among others impacts. Maintenance and depreciation of building and equipment expenses decreased by 4.7% compared with the first quarter of last year, mainly due to the decrease in the overall scope of real estate assets of the Group, due to efficiency measures taken. 

Financial stability

The equity attributed to the shareholders of the Bank grew by 3.7% year-over-year, (representing an absolute growth of NIS 356 million) and amounted to NIS 9,851 million as of March 31, 2022. The Tier I equity capital ratio reached 10.79% with a positive excess of 1.54% over the required regulatory ratio - the highest gap among the banks in Israel. This capital surplus allows for growth in credit and for the continuation of business development activities.

The Bank continued its dividend policy, by which it distributes dividends of up to 50% of net income. Accordingly, the Board of Directors today approved a dividend distribution of NIS 160 million, which comprises 50% of net income for the first quarter of 2022 - the highest among the banks in Israel. This is in addition to dividends of NIS 380 million distributed during the first quarter of the year. The annual divided return as of May 5, 2022, amounted to 7.33%, which is the highest among the banks in Israel.

Innovation

The First International Bank continues to strengthen its connection with its customers, offering unique and competition generating products, such as its Multibank system which shows the customer the details of all their accounts at the different banks, thus encouraging competition. The First International Bank was the first of all banks to introduce a system of this kind.

Additional innovations are: the loyalty program, Beyond, providing for a customer experience in the world of aviation and tourism, the launch of an academic school for capital markets education, which is a professional digital course for the Bank's customers, the Life Plan program which is a holistic digital tool for investment management, and more. The Bank continues to invest in digital and innovation across all fields of its operations, and recently, the innovation and digital group at the Bank was expanded to a full department, which also includes strategy. digital and innovation

Management Comment

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Group, stated: "The results for the first quarter of 2022, are due to continued growth in the current core operations of the Bank across the various fields of activity. We achieved all this while maintaining a high level of capital adequacy enabling growth, as well as financial stability and asset quality. The Bank continues to continuously innovate and develop investment and savings products which are tailored to current market conditions and economic trends."

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES
Principal financial ratios		For the three months ended March 31				For the year ended December 31
		2022		2021		2021
						in %
Execution indices
Return on equity attributed to shareholders of the Bank(1)		13.0%		*13.1%		14.7%
Return on average assets(1)		0.71%		*0.72%		0.82%
Ratio of equity capital tier 1		10.79%		11.57%		11.46%
Leverage ratio		5.26%		*5.32%		5.34%
Liquidity coverage ratio(2)		126%		140%		128%
Net stable funding ratio(3)		137%				**139%
Ratio of total income to average assets(1)		2.6%		2.6%		2.6%
Ratio of interest income, net to average assets (1)		1.6%		1.6%		1.6%
Ratio of fees to average assets (1)		0.8%		0.9%		0.8%
Efficiency ratio		58.5%		*59.0%		58.3%
Credit quality indices
Ratio of provision for credit losses to credit to the public		1.01%		1.35%		1.05%
Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public		0.59%		0.73%		0.62%
Ratio of provision for credit losses to total non-accruing credit to the public		175%		259%		244%
Ratio of net write-offs to average total credit to the public (1)		(0.02%)		0.03%		(0.01%)
Ratio of income for credit losses to average total credit to the public (1)		-		(0.04%)		(0.23%)

 

Principal data from the statement of income		For the three months ended March 31
		2022		2021
				NIS million
Net profit attributed to shareholders of the Bank		322		*304
Interest Income, net		744		670
Income from credit losses		-		9
Total non-Interest income		426		*441
Of which:      Fees		384		361
Total operating and other expenses		684		656
Of which:      Salaries and related expenses		414		398
Dismissal expenses		2		3
Primary net profit per share of NIS 0.05 par value (NIS)		3.21		*3.03

Principal data from the balance sheet		31.3.22		31.3.21		31.12.21
						NIS million
Total assets		182,013		*172,500		180,470
of which:    Cash and deposits with banks		53,979		59,471		57,370
Securities		14,850		*14,730		15,091
Credit to the public, net		106,254		92,321		101,164
Total liabilities		171,725		*162,598		170,033
of which:    Deposits from the public		154,038		146,600		153,447
Deposits from banks		6,504		3,326		5,144
Bonds and subordinated capital notes		3,675		3,716		3,356
Capital attributed to the shareholders of the Bank		9,851		*9,495		10,003

Additional data		31.3.22		31.3.21		31.12.21
Share price (0.01 NIS)		13,810		9,313		12,950
Dividend per share (0.01 NIS)		379		-		543

*    Immaterial adjustment of comparative data.
**   Reclassified.
⁽¹⁾     Annualized.
⁽²⁾    The ratio is computed in respect of the three months ended at the end of the reporting period.
⁽³⁾     According to instructions of the Bank of Israel the Net stable funding ratio was calculated since 2021, Therefor no comparative data for the three months ended March 31, 2021 is stated.

CONSOLIDATED STATEMENT OF INCOME				(NIS million)
		For the three months ended March 31				For the year ended December 31
		2022		2021		2021
		(unaudited)		(unaudited)		(audited)
Interest Income		871		729		3,150
Interest Expenses		127		59		356
Interest Income, net		744		670		2,794
Income from credit losses		-		(9)		(216)
Net Interest Income after expenses from credit losses		744		679		3,010
Non- Interest Income
Non-Interest Financing income		34		*76		303
Fees		384		361		1,444
Other income		8		4		9
Total non- Interest income		426		441		1,756
Operating and other expenses
Salaries and related expenses		414		398		1,601
Maintenance and depreciation of premises and equipment		81		85		340
Amortizations and impairment of intangible assets		27		26		105
Other expenses		162		147		606
Total operating and other expenses		684		656		2,652
Profit before taxes		486		464		2,114
Provision for taxes on profit		169		*161		728
Profit after taxes		317		303		1,386
The bank's share in profit (loss) of equity-basis investee, after taxes		17		13		69
Net profit:
Before attribution to non–controlling interests		334		316		1,455
Attributed to non–controlling interests		(12)		(12)		(50)
Attributed to shareholders of the Bank		322		304		1,405
		NIS
Primary profit per share attributed to the shareholders of the Bank
Net profit per share of NIS 0.05 par value		3.21		3.03		14.00

*         Immaterial adjustment of comparative data.

STATEMENT OF COMPREHENSIVE INCOME				(NIS million)
		For the three months ended March 31				For the year ended December 31
		2022		2021		2021
		(unaudited)		(unaudited)		(audited)
Net profit before attribution to non–controlling interests		334		*316		1,455
Net profit attributed to non–controlling interests		(12)		(12)		(50)
Net profit attributed to the shareholders of the Bank		322		304		1,405
Other comprehensive income (loss) before taxes:
Adjustments of available for sale bonds to fair value, net		(216)		11		27
Adjustments of liabilities in respect of employee benefits(1)		131		66		(24)
Other comprehensive income (loss) before taxes		(85)		77		3
Related tax effect		30		(26)		(1)
Other comprehensive income (loss) before attribution to non–controlling interests, after taxes		(55)		51		2
Less other comprehensive income (loss) attributed to non–controlling interests		(5)		1		-
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes		(50)		50		2
Comprehensive income before attribution to non–controlling interests		279		367		1,457
Comprehensive income attributed to non–controlling interests		(7)		(13)		(50)
Comprehensive income attributed to the shareholders of the Bank		272		354		1,407

*          Immaterial adjustment of comparative data.

⁽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)
		31.3.22		31.3.21		31.12.21
		(unaudited)		(unaudited)		(audited)
Assets
Cash and deposits with banks		53,979		59,471		57,370
Securities		14,850		*14,730		15,091
Securities which were borrowed		322		244		845
Credit to the public		107,342		93,581		102,240
Provision for Credit losses		(1,088)		(1,260)		(1,076)
Credit to the public, net		106,254		92,321		101,164
Credit to the government		843		659		811
Investments in investee company		740		648		713
Premises and equipment		912		954		931
Intangible assets		297		265		300
Assets in respect of derivative instruments		2,332		1,603		1,709
Other assets(2)		1,484		1,605		1,536
Total assets		182,013		172,500		180,470
Liabilities and Shareholders' Equity
Deposits from the public		154,038		146,600		153,447
Deposits from banks		6,504		3,326		5,144
Deposits from the Government		476		694		960
Bonds and subordinated capital notes		3,675		3,716		3,356
Liabilities in respect of derivative instruments		2,360		1,554		2,038
Other liabilities(1)(3)		4,672		*6,708		5,088
Total liabilities		171,725		162,598		170,033
Capital attributed to the shareholders of the Bank		9,851		*9,495		10,003
Non–controlling interests		437		407		434
Total equity		10,288		9,902		10,437
Total liabilities and shareholders' equity		182,013		172,500		180,470

*       Immaterial adjustment of comparative data.

⁽¹⁾   Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 134 million and NIS 88 million and NIS 79 million at 31.3.22, 31.3.21 and 31.12.21, respectively.
⁽²⁾   Of which: other assets measured at fair value in the amount of NIS 261 million and NIS 375 million and NIS 333 million at 31.3.22, 31.3.21 and 31.12.21, respectively.
⁽³⁾   Of which: other liabilities measured at fair value in the amount of NIS 435 million and NIS 375 million and NIS 641 million at 31.3.22, 31.3.21 and 31.12.21, respectively.

 

STATEMENT OF CHANGES IN EQUITY						(NIS million)
		For the three months ended March 31, 2022 (unaudited)
		Share capital and premium (1)		Accumulated other comprehensive loss		Retained earnings (2)		Total		Non- controlling interests		Total equity
Balance as at December 31, 2021 (audited)		927		(181)		9,257		10,003		434		10,437
Adjustment of the opening balance, net of tax, due to the  effect of initial implementation*		-		-		(44)		(44)		(4)		(48)
Adjusted balance at January 1, 2022, following initial implementation		927		(181)		9,213		9,959		430		10,389
Net profit for the period		-		-		322		322		12		334
Dividend		-		-		(380)		(380)		-		(380)
Other comprehensive loss, net after tax effect		-		(50)		-		(50)		(5)		(55)
Balance as at March 31, 2022		927		(231)		9,155		9,851		437		10,288
		For the three months ended March 31, 2021 (unaudited)
		Share capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)		Total		Non- controlling interests		Total equity
Balance as at December 31, 2020 (audited)		927		(183)		8,397		9,141		394		9,535
Net profit for the period		-		-		**304		304		12		316
Other comprehensive income, net after tax effect		-		50		-		50		1		51
Balance as at March 31, 2021		927		(133)		8,701		9,495		407		9,902
		For the year ended December 31, 2021 (audited)
		Share capital and premium (1)		Accumulated other comprehensive income (loss)		Retained earnings (2)		Total		Non- controlling interests		Total equity
Balance as at December 31, 2020 (audited)		927		(183)		8,397		9,141		394		9,535
Net profit for the year		-		-		1,405		1,405		50		1,455
Dividend		-		-		(545)		(545)		(10)		(555)
Other comprehensive income, after tax effect		-		2		-		2		-		2
Balance as at December 31, 2021		927		(181)		9,257		10,003		434		10,437

*     Cumulative effect of the initial implementation of US accounting principles in the matter of financial instruments – credit losses (ASC-326).
**      Immaterial adjustment of comparative data.

⁽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
E-mail: zucker.d@fibi.co.il
Tel: +972-3-519-6224

Ehud Helft
GK Investor & Public Relations
E-mail: fibi@gkir.com
Tel: +1-646-201-924

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SOURCE First International Bank of Israel

FAQ

What were the financial results of First International Bank of Israel for Q1 2022?

The bank reported a net profit of NIS 322 million, a 5.9% increase compared to Q1 2021.

What is the return on equity for First International Bank of Israel in Q1 2022?

The return on equity reached 13% for Q1 2022.

How much did First International Bank of Israel approve for dividend distribution in Q1 2022?

The bank's Board of Directors approved a dividend distribution of NIS 160 million, which is 50% of net income.

What growth did First International Bank of Israel see in credit to the public?

Credit to the public grew by 14.7% compared to Q1 2021.

What is the Tier I equity capital ratio of First International Bank of Israel?

The Tier I equity capital ratio reached 10.79%, which is 1.54% above the regulatory requirement.