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 ,000,000Ordinary Preferred ,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/ and thereafter 29/4/2008 1/8/ /11/ /12/ State repays to the Bank NIS million of the perpetual deposits Bank repays Bank of Israel the balance of the credit line – NIS 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 Cash and bank deposits Securities Credit to the public Credit to the Israeli government Fixed assets Other assets Perpetual deposits with the Treasury 1,519.51,057.3Total assets Liabilities Deposits of the public Deposits from banks Deposits of the Government 0.1 Perpetual deposit 20.2-Capital notes Other liabilities Non-participating preference shares Participating preference shares 1, Total liabilities Shareholders 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/ Income from financing operations before allowance for doubtful debts (13.8)(16.9)Allowance for doubtful debts Income from financing operations after allowance for doubtful debts Operating and other income Operating commissions Income from investments in shares Other income Total operating and other income Operating and other expenses Salaries and related expenses - 9.0Expenses in respect of employee retirement 2.9 Building and equipment maintenance and depreciation Other expenses Total operating and other expenses Income from ordinary operations before tax Provision for taxes Net 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 to Between 10and Between 20and Between 40and Between 80and Between 150and Between 300and Between 600and1, Between 1,200and2, Between 2,000and4, Between 4,000and8, Between 8,000and20, Between 20,000and40, Between 40,000and200,
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 Agriculture Industry Construction and real estate Electricity Trade Hotels, guest houses and food Transportation and storage Communications and computer services Financial services Other business services Public and communal services Private individuals Total Credit risk included in the various industries: Settlement movements Local authorities and controlled entities
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 deposits Securities Credit to the public Credit to Israeli government Fixed assets Other assets Perpetual deposits in Treasury Total assets ,057.3 Liabilities Deposits of the public Government deposits Perpetual deposit Other liabilities Non-participating preference shares Participating preference shares Total liabilities Difference Forward transactions Total * 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, , , , * 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 Restructured Designated for restructuring Temporarily in arrears Under special supervision Total balance sheet credit to problematic debtors
Breakdown of credit by classification (cont.) (NIS millions) Balance sheet credit31/12/200831/12/2007 Total balance sheet credit to problematic debtors Add: credit to debtors not classified as problematic * Total credit before general allowance for doubtful debts 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 Total off-balance sheet credit risk
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, Provisions during the year 4.1- Reduction of provisions Collection of debts written off in previous years Total amount carried to statement of income Write-off of debts Balance of allowance as of December 31, 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, , , ,
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 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/ Balance following changes Cash and bank deposits Securities Credit to the public 5,107.14, Credit to the Israeli government Fixed assets Other assets Perpetual deposits with the Treasury Total assets 5,756.84, ,027.4 Liabilities Deposits of the public Government deposit and perpetual deposit 5,022.74, Other liabilities Total liabilities 5,113.34, Non-participating preference shares Participating preference shares Shareholders equity Total equity (including preference shares) sold in the process Total liabilities and equity 5,756.84, ,027.4