Financial institution Leumi (TASE: LUMI) launched first quarter financials this morning, displaying a web revenue of NIS 2.4 billion. This represents a 12% rise as compared with the primary quarter of 2024, if final yr’s sale of the financial institution’s headquarters constructing is excluded. Together with that transaction, the web revenue within the first quarter of this yr was 14% decrease than within the corresponding quarter.
The financial institution, headed by Hanan Friedman, achieved a return on fairness of 15.4% within the first quarter of this yr. This compares with a return of 15.6% within the corresponding quarter final yr, if the actual property transaction is excluded. Together with that transaction, the return on fairness within the first quarter of final yr was 20.2%. For 2024 as a complete, the financial institution achieved a return on fairness of 16.9%.
The financial institution has declared a dividend of 40% of its quarterly revenue, amounting to NIS 961 million, of which NIS 721 million shall be distributed in money, whereas the rest shall be within the type of a share buyback. Below a plan revealed in March, Leumi intends to boost its dividend to 50% of revenue, however, not like at Low cost Financial institution, its board has but to make a proper resolution on the matter.
Financial institution Leumi’s quarterly web curiosity earnings rose by 6.6% as compared with the primary quarter of 2024 to NIS 4 billion. The financial institution says that the rise was the results of a rise in its credit score portfolio, partly offset by erosion in credit score spreads and better curiosity paid on deposits. As on the different banks, payment earnings at Financial institution Leumi rose sharply, by 9% to NIS 1 billion.
Over the yr to the top of March, Financial institution Leumi’s credit score portfolio elevated by 1.6%, which compares with 2% development at Financial institution Hapoalim and Low cost Financial institution, which revealed their first quarter outcomes yesterday. The financial institution described this as “accountable and conservative development within the credit score portfolio, with a give attention to strategic segments.”
Financial institution Leumi continues to point out a heightened urge for food for the mortgage market. Housing loans grew by 10.4% year-on-year to NIS 148.3 billion.
The credit score loss expense shrank considerably, by 75%, as compared with the corresponding quarter, to NIS 55 million. That is the reverse of the development seen yesterday at Financial institution Hapoalim and Low cost Financial institution. The credit score loss expense at Financial institution Leumi represents 0.05% of the typical steadiness of credit score to the general public, a really low proportion. Within the corresponding quarter, the proportion was 0.21%, just like the determine reported by the competitor banks for the primary quarter of this yr. Financial institution Leumi stated that its credit score loss expense was totally a common provision, and was partly offset by debt recoveries, and was low partly due to shorter mortgage durations.
Within the corresponding quarter, credit score loss provisions rose due to the impact of the conflict that broke out on October 7, 2023. “Regardless of the advance in portfolio high quality metrics, the availability for credit score losses continues to mirror safety and financial uncertainty due to world and native developments,” the financial institution stated.
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Israeli banks’ shares have been extraordinarily widespread over the previous few years. Simply because the starting of this yr, they’ve risen by greater than 20%, and in Financial institution Leumi’s case by 26%, to provide it a market cap of NIS 81 billion. The second largest financial institution in market cap phrases is Financial institution Hapoalim, at NIS 74 billion. Final yr, Financial institution Leumi’s share worth rose by 97%, which compares with 78% for Financial institution Hapoalim. Following the discharge of its first quarter financials, Financial institution Leumi’s share worth is up by 0.9% on the Tel Aviv Inventory Trade this morning.
Printed by Globes, Israel enterprise information – en.globes.co.il – on Might 20, 2025.
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