The First International Bank Reports its Financial Results for the First Quarter of 2024

Rhea-AI Summary

First International Bank of Israel (TASE: FIBI) reported its Q1 2024 results with a net income of NIS 569 million, a 14% increase from Q4 2023 but a 9.8% decrease from Q1 2023. The return on equity was 18.7%, and total revenue was NIS 1,581 million, down 7% year-over-year. Public deposits grew by 2.9% from the end of 2023 and by 13.4% year-over-year. The total customer asset portfolio increased by 7.2% compared to the end of 2023, reaching NIS 720 billion. The bank's Board approved a dividend of 40% of net income for the quarter. However, credit to the public decreased by 2% from the end of 2023. Operating expenses rose slightly by 1% year-over-year to NIS 731 million, while the efficiency ratio worsened to 46.2% from 43.5% in Q1 2023.

Positive

• Net income of NIS 569 million, up 14% from Q4 2023.
• Return on equity of 18.7%.
• Public deposits increased by 2.9% from the end of 2023 and by 13.4% year-over-year.
• Customer asset portfolio grew by 7.2% from the end of 2023, reaching NIS 720 billion.
• Equity attributed to shareholders increased by 13.5% year-over-year.
• Tier 1 equity ratio rose to 11.78%, exceeding regulatory requirements.
• Liquidity coverage ratio improved to 161%.
• Board approved a 40% dividend of net income for the quarter.

Negative

• Net income decreased by 9.8% compared to Q1 2023.
• Total revenue fell by 7% year-over-year to NIS 1,581 million.
• Financing income from operating activities decreased by 12.6% year-over-year.
• Credit to the public declined by 2% compared to the end of 2023 and by 2.5% year-over-year.
• Operating expenses increased by 1% year-over-year to NIS 731 million.
• Efficiency ratio worsened to 46.2% from 43.5% in Q1 2023.

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 2024
• The 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 year
• The 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 billion
• Equity attributed to shareholders of the Bank increased by 13.5% compared to the end of the first quarter of 2023
• The 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
zucker.d@fibi.co.i
+972-3-519-6224

View original content:https://www.prnewswire.com/news-releases/the-first-international-bank-reports-its-financial-results-for-the-first-quarter-of-2024-302156666.html

SOURCE First International Bank of Israel

FAQ

What were First International Bank of Israel's net income and revenue for Q1 2024?

The net income was NIS 569 million, and the total revenue was NIS 1,581 million.

How did FBKIF's public deposits change in Q1 2024?

Public deposits increased by 2.9% from the end of 2023 and by 13.4% compared to Q1 2023.

What was FBKIF's return on equity in Q1 2024?

The return on equity was 18.7%.

How did FBKIF's credit to the public perform in Q1 2024?

Credit to the public decreased by 2% from the end of 2023 and by 2.5% year-over-year.

What was FBKIF's efficiency ratio in Q1 2024?

The efficiency ratio was 46.2%, compared to 43.5% in Q1 2023.

What dividend did FBKIF's Board approve for Q1 2024?

The Board approved a dividend amounting to 40% of the net income for the quarter.

What was FBKIF's tier 1 equity ratio in Q1 2024?

The tier 1 equity ratio was 11.78%.

How did FBKIF's total customer asset portfolio change in Q1 2024?

The total customer asset portfolio increased by 7.2% from the end of 2023, reaching NIS 720 billion.