Presentation on theme: "Industrial Development Bank of Israel Ltd. Summary of Data The description of the Bank presented below and the data included herein are not exhaustive."— Presentation transcript:
Industrial Development Bank of Israel Ltd. Summary of Data The description of the Bank presented below and the data included herein are not exhaustive and should not be construed to be a representation or commitment on the part of the Bank and/or its senior officers, or on the part of the State of Israel and/or the Government Companies Authority. This description and data may contain or be based on assessments of the Bank and/or on forward-looking information which, by its nature, is uncertain and may not be realized or which may prove to be inaccurate.
Year and type of incorporation The Bank was incorporated in 1957 as a limited liability company. The Bank is a public company and is defined as a mixed company pursuant to the Government Companies Act. In 1989, the Bank was issued a commercial banking license. On August 1, 2008, the Banks license expired and the Bank ceased being a banking entity.
Percentage holdings in the rights of the Bank as of December 2008 EquityVoting rights 82.14%45.78%State of Israel 0.24%19.32%Bank Leumi 0.10%9.50%Discount Bank 0.16%11.77%Bank Hapoalim 17.36%13.63%Others
Shares traded on the Tel Aviv Stock Exchange Market cap as of March 21, 2009 (NIS millions) Market price as of March 21, 2009 QuantityClass of shares 4.5450.01,000,000Ordinary Preferred 38.0223.517,000,000C 18.11,805.01,000,000CC 36.42,100.01,734,779CC1 on the Tel Aviv Stock Exchange 97.0Total market cap Shares not traded, held by foreign residents and Israeli residents* Par value in dollars of shares ($000) as of December 31, 2008 Class of shares 1,657D 6,199DD 7,856Total * These shares are not part of the shares being sold and are supposed to be redeemed by the Bank upon consummation of the sale of the shares to the purchaser.
Major developments at the Bank in recent years Receipt of credit line from Bank of Israel – new management at Bank Activation of Run-off Plan and focus on credit collection and redemption of deposits of the public Decision of ministerial committee to privatize the Bank as part of arrangement between Bank and its shareholders Banks banking license expired Continuation of the collections process 8/2002 2003 and thereafter 29/4/2008 1/8/2008 24/11/2008 31/12/2008 2009 State repays to the Bank NIS 857.5 million of the perpetual deposits Bank repays Bank of Israel the balance of the credit line – NIS 304.5 million Court approval of arrangement plan between Bank and its shareholders
Current activities of the Bank The Bank mainly collects credit from a variety of clients (construction, industry, financial services and private clients) The Bank has proven experience in debt collection. The Bank has procedures regulating the granting of credit, management of credit and the required controls. The Bank has a computerized system for managing credit (amortization tables, payment demands, etc.) developed over a number of years. The system provides for all facets of credit management and the accompanying financial reporting. The system belongs to the Bank and is maintained by an outsourced service. The Bank has a computerized system for managing collateral.
Human Resources The employees of the Bank have expertise in all areas of credit, including granting credit, setting up contracts, collateral generation, recording and maintenance of bookkeeping records, collections. The staff of the Bank has experience in accounting (financial statement preparation) and law. The Banks operations are carried out through four departments. Department heads report to the CEO. The Bank has 35 employees. An agreement was reached with the employees which settles their rights upon privatization. The financial statements include a provision covering the Banks liability for this agreement.
Balance sheet as of December 31, 2008 (NIS Millions) 31/12/200731/12/2008 Assets 33.8575.3Cash and bank deposits 46.337.9Securities 557.9407.6Credit to the public 24.72.8Credit to the Israeli government 0.80.5Fixed assets 7.23.3Other assets 848.829.9Perpetual deposits with the Treasury 1,519.51,057.3Total assets Liabilities 54.626.7Deposits of the public 481.2-Deposits from banks 356.0323.1Deposits of the Government 0.1 Perpetual deposit 20.2-Capital notes 50.763.9Other liabilities 276.0335.8Non-participating preference shares 170.6203.6Participating preference shares 1,409.4953.2Total liabilities 110.1104.1Shareholders equity 1,519.51,057.3Total liabilities and equity * Not including government-guaranteed credit to the Israel Electric Company and the deposit of the State which was used to provide this loan and which is supposed to be transferred to the State.
31/12/200731/12/2008 29.3 84.0Income from financing operations before allowance for doubtful debts (13.8)(16.9)Allowance for doubtful debts 43.1 100.9Income from financing operations after allowance for doubtful debts Operating and other income 1.1 0.6Operating commissions 8.7 1.0Income from investments in shares 1.7 1.4Other income 11.5 3.0Total operating and other income Operating and other expenses 18.5 19.9Salaries and related expenses - 9.0Expenses in respect of employee retirement 2.9 Building and equipment maintenance and depreciation 9.4 9.6Other expenses 30.8 41.4Total operating and other expenses 23.8 62.5Income from ordinary operations before tax 1.6 9.5Provision for taxes 22.2 53.0Net income for the year Statement of income – year ended December 31, 2008 (NIS millions)
Classification of credit to the public and off-balance sheet credit risk by size of debtor* as of December 31, 2008 * Not including government-guaranteed credit to the Israel Electric Company that was granted from the State deposit which is supposed to be assigned to another party. Amount of credit to debtor Number of debtorsCreditCredit risk NIS thousands NIS millions Up to10340.1- Between 10and20330.5- Between 20and40180.5- Between 40and80191.10.1 Between 80and150171.70.2 Between 150and300325.61.2 Between 300and6004419.30.5 Between 600and1,2005038.62.4 Between 1,200and2,0002535.13.7 Between 2,000and4,0002560.87.6 Between 4,000and8,000417.24.1 Between 8,000and20,000774.013.3 Between 20,000and40,000238.030.1 Between 40,000and200,0003156.964.6 313449.4127.8
Overall credit risk* to the public by industry as of December 31, 2008 (NIS millions) *Not including government-guaranteed credit to the Israel Electric Company. Balance sheet credit risk Off-balance sheet credit risk Overall credit risk to the public Annual expense in respect of the specific allowance for doubtful debts Balance of problematic debts Agriculture18.104.22.168-2.1 Industry175.510.7186.27.5-138.7 Construction and real estate37.440.878.24.0-64.0 Electricity119.55.2124.7-39.7 Trade22.214.171.124.66.2 Hotels, guest houses and food126.96.36.199.6-6.4 Transportation and storage13.2- 0.1-- Communications and computer services188.8.131.52-1.9 Financial services28.064.492.4-1.4 Other business services22.61.524.10.1-5.1 Public and communal services184.108.40.206.223.0 Private individuals3.4- -0.3 Total449.6127.8577.413.5-288.8 Credit risk included in the various industries: Settlement movements92.12.294.311.8-49.6 Local authorities and controlled entities 2.2- --
Assets and liabilities, by linkage bases as of December 31, 2008* (NIS millions) AssetsUnlinked NIS Index-linked NIS US $Other currencies Non- monetary items Total Cash and bank deposits5220.127.116.11.1-575.3 Securities-0.2--37.737.9 Credit to the public73.8235.185.912.8-407.6 Credit to Israeli government-2.8--- Fixed assets----0.5 Other assets2.40.5--0.43.3 Perpetual deposits in Treasury--29.9-- Total assets635.1239.8130.912.938.61,057.3 Liabilities Deposits of the public18.104.22.168--26.7 Government deposits-225.997.2--323.1 Perpetual deposit0.1---- Other liabilities24.622.214.171.124-63.9 Non-participating preference shares --335.8-- Participating preference shares--203.6-- Total liabilities42.2272.3637.61.1-953.2 Difference592.932.5-506.7-11.838.6104.1 Forward transactions95.9-35.871.611.5--- Total497.03.3435.1-0.338.6104.1 * Not including government-guaranteed credit to the Israel Electric Company that was granted from the State deposit which is supposed to be assigned to another party.
Balances of credit* to the public in the financial statements: December 31,Balance (NIS millions) 20024,059.6 20032,784.3 20041,826.1 20051,275.6 2006848.1 2007557.9 2008407.6 * Not including State-guaranteed credit to the Israel Electric Company to be assigned to another party.
Breakdown of credit by classification (NIS millions) Balance sheet credit 31/12/200831/12/2007 Non-income bearing 22.169.7 Restructured 24.431.5 Designated for restructuring 8.517.3 Temporarily in arrears 1.98.7 Under special supervision 170.5181.7 Total balance sheet credit to problematic debtors 227.4308.9
Breakdown of credit by classification (cont.) (NIS millions) Balance sheet credit31/12/200831/12/2007 Total balance sheet credit to problematic debtors227.4308.9 Add: credit to debtors not classified as problematic * 222.0294.2 Total credit before general allowance for doubtful debts 449.4603.1 Add: Credit to the Israel Electric Company4,699.54,963.2 Less: General allowance for doubtful debts(41.8)(45.2) Total credit in the financial statements5,107.15,521.1 * Not including State-guaranteed credit to the Israel Electric Company to be assigned to the State.
Breakdown of credit by classification (cont.) (NIS millions) * Most of the amount derives from letters of indemnification issued by the Bank in favor of the receiver appointed to realize the assets of debtors in legal proceedings. The letters of indemnification are in respect of receipts that were credited to debtor accounts in the Bank from the proceeds of the realized assets. Off-balance sheet credit risk 31/12/200831/12/2007 In respect of debtors classified as problematic* 61.4 *81.2 * In respect of debtors not classified as problematic 66.482.4 Total off-balance sheet credit risk 127.8163.6
Allowance for doubtful debts as of December 31, 2008 (NIS Millions) Specific allowance General and supplemental allowance Total Balance of allowance as of January 1, 2008 572.645.2617.8 Provisions during the year 4.1- Reduction of provisions 9.1-3.4-12.5- Collection of debts written off in previous years 8.5-- Total amount carried to statement of income 13.5-3.4-16.9- Write-off of debts 28.0-- Balance of allowance as of December 31, 2008 531.141.8572.9 Of which an amount of the allowance that was not deducted from credit to the public 0.1-
Balance of the credit line from the Bank of Israel (NIS millions) December 31,Balance 20022,131.5 20032,091.2 20041,403.9 20051,033.7 2006761.5 2007481.2 2008-
Pro forma balance sheet after completion of the sales process on the basis of the December 31, 2008 financial statements (NIS millions) 1.Transfer of credit of Electric Company. 2.Repayment of balance of perpetual deposit and redemption of D and DD preference shares (at rate of NIS 3.802 to the dollar). 3.Receipt from the State of dividend in arrears in respect of D and DD shares held by the public. 4.Payment of dividend in arrears on the D and DD shares held by the public. 5.Cancellation of dividend in arrears in respect of preference shares held by the public and the State as a result of the sale. Assets31/12/200812345Balance following changes Cash and bank deposits 575.3--14.614.6--575.3 Securities 37.9----- Credit to the public 5,107.14,699.5-----407.6 Credit to the Israeli government 2.8----- Fixed assets 0.5----- Other assets 3.3----- Perpetual deposits with the Treasury 29.9-29.9---- - Total assets 5,756.84,699.5-29.9-14.614.6--1,027.4 Liabilities Deposits of the public 26.7----- Government deposit and perpetual deposit 5,022.74,699.5-----323.2 Other liabilities 63.9----- Total liabilities 5,113.34,699.5-----413.8 Non-participating preference shares 335.8-29.9-14.614.6-63.0-242.9 Participating preference shares 203.6----35.0-168.6 Shareholders equity 104.1----98.0202.1 Total equity (including preference shares) sold in the process 643.5-29.9-14.614.6--613.6 Total liabilities and equity 5,756.84,699.5-29.9-14.614.6--1,027.4