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30/06/2012 Overview. Q2 Highlights 2 Continued improvement in earnings from financing operations from core banking activity Continued growth of the credit.

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Presentation on theme: "30/06/2012 Overview. Q2 Highlights 2 Continued improvement in earnings from financing operations from core banking activity Continued growth of the credit."— Presentation transcript:

1 30/06/2012 Overview

2 Q2 Highlights 2 Continued improvement in earnings from financing operations from core banking activity Continued growth of the credit portfolio, mainly in consumer credit and mortgages, as well as commercial and corporate credit - leading to a decrease in concentration indices and improved distribution; FIBIs market share (local market): 9.2% Core capital ratio: 9%, the highest in the industry In Q2, capital market commissions stabilized after declines due to slowing in market activity; FIBI maintained its market share throughout Decreased expenses (operating and other) due to fiscal restraint

3 3 Net Earnings and ROE NIS Millions 281 NIS Millions 285 NIS Millions Note: The ROE assuming average capital industry ratio of (8.3%) in the first half of 2012 stands on 10.5%

4 Statements of income 1-6/ /2011 NIS Millions Gross change 1-6/ / ,0841,107 Net interest income 520 Expenses (income) for credit losses (0.16% provision rate) (29)1,0841,055 Net interest income after expenses for credit losses (39) Total non-interest income Of which: income (expenses) non-interest (63) Commissions (decrease stems mainly from decreses in customers activity in the capital markets) (13)185 Other Income (38)1,4341,396 Total operating and other expenses (( Of which: salaries and related expenses (including losses appointed time compensation) (( Holding and depreciation on buildings and equipment Amortization and impairment of intangible assets (21) Other expenses (30) Profit before tax Provision for taxes on income (5) Banks share of profit of associates Net earnings 10.4%9.8% ROE 8.36%9.0% Core (Tier 1) capital ratio (end of period) 4

5 Statements of income 4-6/ /2012 NIS Millions Gross change 1-3/ / Net interest income (10)3121 Expenses (income) for credit losses (0.13% provision rate) Net interest income after expenses for credit losses (48) Total non-interest income Commissions (52)6513 Of which: income (expenses) non-interest (62)4319)) Of which: reconciliations to fair value of derivatives (4) Total operating and other expenses 10)) Of which: salaries and related expenses (including losses appointed time compensation) (2) Holding and depreciation on buildings and equipment Amortization and impairment of intangible assets Other expenses Profit before tax Provision for taxes on income (1) Banks share of profit of associates Net earnings 9.9%9.8% ROE 8.81%9.0% Core (Tier 1) capital ratio (end of period) 5

6 6 The Ratio of Total Income to Total Risk Assets (Return of Income on Risk Assets)

7 1-6/ /2011 Operating & Other Expenses NIS Millions

8 Efficiency Ratio: Total Income to Operating Expenses 8 Total Income % Total Income / Operating Expenses 1-6/2011 Operating Expenses Ratio of Total Income to Operating Expenses

9 Credit to the Public NIS Millions 9 Credit to the Public by Operating Segments Change in % Compared to % 28,24028,91230,197 Total Private Clients 7.5% 14,27214,70215,345 Of which: Mortgage 3.0% 13,02313,38713,412 Commercial + Small Business 2.7% 22,59122,67923,212 Corporate 4.65% 63,85464,97866,821 Total Credit to the Public

10 Ratio of Provision for problematic Debts to Credit to the Public Other 4 Leading Banks FIBI 10 *Beginning in 2011, all collection on problematic debts is shown as Expenses for credit losses instead of earnings from financing operations **The ratio of provision for credit losses to credit to public in the first half of 2012 is 0.16%. New measurement according to new B.O.I problematic Debts Regulation*

11 Deposits from the Public 11 Deposits by Segments Activity Change in % Compared to %21,57823,57123,742 Private Banking 10.1%24,65326,36527,137 Household 10.1%46,23149,93650,879 Total Private Deposits ((0.5%10,69011,13810,637 Commercial + Small Business (2.9%)22,16420,31321,512 Corporate 5.0%79,08581,38783,028 Total NIS Millions

12 Composition of Total Proprietary Trading Book Composition Composition Volume Volume %74% 9,2658,530 Government bonds & Secured by Government bonds 92%90% State of Israel bonds 14%15%1,6591,709 Commercial Banks bonds 4% Shares 7%8% Other Of which: Fx Corporate Bonds Of which: NIS Corporate Bonds 100% 12,34711,583 Total NIS Millions Government bonds & Secured by Government bonds 74% Total 84*Spain 78*Italy 0Portugal 0Greece 0Ireland NIS Millions 12 PIIGS proprietary trading book exposure *No significant change in the quarter

13 Deposits from the Public 83.0 NIS Billion Deposits to Credit Ratio Liquid Assets to Deposits Ratio Capital Adequacy Basel II Tier 1 Capital Adequacy :Of which Corporate and Commercial Consumer 15.3 Mortgage Credit to the Public 66.8 NIS Billion Gov. & Bank Deposits 1. 5 NIS Billion 9.0% 124.3% 32.3% 39.3% Of capital available for Investments State of Israel Bonds: 7.6 NIS Billion Deposits-Bank of Israel: 16.4 NIS Billion Sovereigns Bonds: 0.9 NIS Billion Deposits in Banks: 2.4 NIS Billion Banks Bonds: 1.7 NIS Billion NIS+foreign Corporate Bonds: 0.9 NIS Billion Structure Products, Hedge Funds & Stocks:0.7 NIS Billion Market Risks in VAR Terms: (0.03) NIS Billion Capital Notes 5.4 NIS Billion Capital available for Investments 4.1 NIS Billion 13.82% 11.07% Credit against liquid assets FIBI Strategic Assets & Liabilities Structure NIS Millions 13

14 14.30% 14.57% 13.42% Core Capital (Tier 1) Ratio Basel II * * * * ** %

15 Key Concentration Indicators 15 Herfindahl index (H) of sector concentration of commercial credit portfolio* Gini index of distribution of credit by borrower size** The share of credit to borrowers whose liability greater than 40 million NIS out of Total ***credit FIBI BANK 5 BANKING GROUPS FIBI BANK 5 BANKING GROUPS FIBI BANK 5 BANKING GROUPS Year *The index range moves from 0 ( full distribution) to 1 (full concentration) (Maximally inequality in the share of credit) 1 to(equality **The index range moves from 0 (full ***The index range moves from 0% (no credit meets the criterion) to 100% (all of the credit is over 40 million NIS)

16 16 RAROC Index Bank of Israels RAROC index measures the risk adjusted return in the 5 leading banks. The index evaluates what is the excess return that shows each bank relative to riskless assets Bank of Israel RAROC Index

17 Changes in Net Profit - Subsidiaries NIS Millions Core (Tier 1) Capital Ratio ROE Percent Change Relative to H1/2011 H1/ % 11.1% 21% % 11.9% (16.2%) % 13.1% 5.2% % 10.7% 21.8%


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