2 Core capital adequacy ratio Net Profit and ROE NIS MillionsROE**NIS MillionsAverage capital6,4186.0%+6,8066,0566,6499.8%+Core capital adequacy ratio9.65%10.04%9.65%10.04%* Assuming core capital ratio of (9.33%), (the Israeli banking industry average core capital ratio as of ), the ROE is 9.18% in FY2013 and 9.42% in Q** The Net profits include amortization of 51 NIS Millions, inflicting a 0.8% reduction in the year’s ROE.
3 Statements of income 2013-2012 NIS Millions Change in %Gross change20122013(2.8%)(63)2,2502,187Interest income, net(27.6%)(37)13497Expenses from credit losses (0.14% provision rate) (*)(1.2%)(26)2,1162,090Net interest income after expenses from credit losses8.7%1351,5471,682Total non-interest income33.3%50150200Of which: non-interest financing4.1%561,3621,418Commissions82.9%293564Other Income3.0%1093,6633,772Total income (after expenses from credit losses)1.2%342,7912,825Total operating and other expenses8.6%75872947Profit before taxes19.1%62324386Provision for taxes on profit(41.2%)(21)5130The bank’s share in profit of equity-basis investees, after taxes(7)577570Net profit9.5%ROE9.65%10.04%Core capital ratio (end of period)(0.96%)2.35%1.39%Bank of Israel average interest rate(13)* Excluding a one time regulatory provision for mortgages - the provision rate is 0.11%
4 An increase in customers activity resulted in a 4 An increase in customers activity resulted in a 4.1% increase in Operating commissions income (NIS Millions)20135620124.1%Excluding fees from capital markets activity we maintain a 11 NIS Millions growth452413-An increase of 8.6% in capital markets fees (linked to an increase in customers activity)
5 Total Income to Total Weighted Risk Assets Ratio
6 An increase of 1.2% in Operating & Other Expenses (NIS Millions) 1-12/20131-12/20121.2%543.3%26-61.0%(4.7%)*The operating expenses increase resulted mainly by the VAT increase on salaries and other expenses* Including amortization of 51 NIS Millions
7 Improved Operational Efficiency Ratio (Consolidated) Total Operating Expenses to Total IncomeTotal IncomeTotal Operating Expenses%Total Operating Expenses / Total Income (Before Expenses from credit losses)Total Operating Expenses / Total Income (After Expenses from credit losses)76.2%
8 FIBI Strategic Assets & Liabilities Structure NIS BillionsFIBI Strategic Assets & Liabilities composite*(NIS Billions)PublicDeposits89.1Credit to the Public68.7Capital AdequacyBasel II14.94%14.96%Core Capital AdequacyBasel II9.65%10.04%Estimate Core Capital AdequacyBasel III10.11%State of Israel Bonds 6.9Deposits to Credit Ratio124.3%129.7%Bank of Israel Deposits 23.1Gov. & Bank Bonds2.0Liquid Assets to Deposits Ratio35.4%38.4%Sovereigns Bonds 1.2Deposits in Banks 3.0Capital Notes 5.7Capital Available for Investment 5.0Banks Bonds 1.5NIS, Corporate Bonds 0.8Structures, Hedge funds &Stocks 0.6Market risk in VAR(0.04)* illustration – not to scale
9 An increase of 5% in balance sheet NIS Billions 5.1%4.1%
10 Continued Growth in Equity Shareholders` equity to total balance ratio is stable despite of the substantial growth in the total balanceShareholders` equity to total balance ratio5%13%6.2%6.2%5.7%The presented growth in equity is after dividend distribution of 200 Nis Millions in june Additional dividend of 100 Nis Millions was distributed in Q1/13.
11 Statement Of Changes in Equity NIS Millions 6,563Balance At 31/12/12 Total Shareholders Equity5702013 Net Earnings for the year(200)Dividend Paid 2013(41)Other Comprehensive loss and others6,892Balance At 31/12/13 Total Shareholders Equity5%Increase in Equity8%Increase inEquity Excluding Dividend Paid
12 Credit to the Public by segments 31.12.2013 NIS Millions Change in % Average Balance Compared to2012Gross Change in Average Balance Compared toGross Change Compared to 20126.1%9121,05515,33516,390Private + Retail (Households)13.4%2,0611,16716,26017,427Mortgage9.8%2,9732,22231,59533,817Total private clients(2.2%)(290)(331)13,27412,943Commercial * + Small Business(5.9%)(1,344)(1,064)23,01021,946Corporate2.0%1,33982767,87967,706Total Credit to the Public(19%)(23%)(34%)(24%)() –* The decrease is due to the closure proceedings of FIBI London.
13 Provisions for Credit losses 2007-2013 Expenses for Credit Losses to Credit to the Public RatioProvisions for Credit losses***In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the bank’s ratio is about 0.08% and the group’s ratio is 0.11% in 2013.** In Q4 Expenses for Credit Losses to Credit to the Public Ratio is 0.19%
14 Gross Change Compared to An increase of Total Client AssetsNIS MillionsChange in % Compared toGross Change Compared to5.6%4,75784,36589,122Total Deposits16.8%32,420192,678225,098Securities clients portfolio13.4%37,177277,043314,220Total Client AssetsBreakdown of deposits portfolio(23%)(32%)(30%)(13%)() –
15 The highest Core Capital Ratio compare to other 4 leading banks Basel III10.11%8.73%8.80%9.20%9.15%***Basel lIIMinimal RegulatoryRequirement ForHAPOALIM&LEUMI*Basel II14.30%MinimalRegulatoryrequirement14.57%Basel II**13.42%13.42%**Gap***-1.3-0.67-0.630.57-%%%
16 FIBI is demonstrating relative strength in main financial ratios Core capital ratio and principal financial ratiosDividend yield2013Expenses for credit losses to credit to the public*Provision for credit losses, to impaired credit (excluding mortgage)Deposits from the public to credit to the publicRatio of core capital to risk assetsShareholders` equity to total balance ratio3.53%**0.14%73.9%129.7%10.04%6.20%1.17%0.34%48.7%109.9%9.37%7.64%-0.11%59.3%118.7%9.43%7.06%0.50%56.8%128.5%9.30%6.10%0.87%0.21%59.7%101.9%9.01%5.49%0.27%57.0%114.2%9.33%6.84%Other 4 leading Banks Average*In annual terms . Financial ratios are as of** In Q1/14 additional dividend of 100 Nis Millions was distributed, hence dividend yield as of 30/6/13 is 5.3%.16
18 2013 Highlights Stable net profit The highest Core capital ratio Net profit of 570 NIS Million in 2013 similarly to 2012, despite of substantially decrease in interest rate and regulatory reforms inflicting reductions in commissionsThe Profit before taxes increased by 8.6%.The highest Core capital ratioThe highest Core capital ratio in the Israeli banking system (also according to Basel III regulation ) – 10.04%.The Highest dividend yield in the Israeli banking systemIn 2013 the bank distributed a dividend of 200 NIS Million, additional dividend of 100 Nis Millions was distributed in Q1/2013.
19 2013 Highlights Improve in Operational Efficiency Ratio Total income increased by 3% while Operating & Other Expenses increased by only 1.2% (despite of an increase of salaries).Most of the increase in the operating expenses is related to the VAT increaseContinued growth in retail core activityA yearly increase of 5% in total balance over the last two years2.0% increase in the average credit balance, and 9.8% in private clients credit balanceTotal client assets (deposits & securities) increased by about 23 Nis Billion (13.4%), including an increase of 8.6% in capital markets feesAn increase of 4.1% in commissions due to growth in customers activity particularly in capital marketsMaintaining quality and spreading of credit portfolioDecrease in credit losses Provisions % compared to 0.2% in 2012.
20 FIBI’s Main Strategic Objectives for the next years Operational improvementContinued efforts to Improve income per employee and per accountMaximizing group’s synergies and economies of scaleContinued on going process to utilize the groups real estate including reduction of HQ areas & effective planning of branches formatCommercial & Corporate BankingCapital and money market ServicesMaintaining quality and diversified credit portfolioIncreasing the Bank`s market share in the commercial sectorStrategyMaintain market leader position and professional reputation in capital and money marketsRetail CustomersContinued development of online and mobile bankingMaintain market position in private banking & investment consultancyCustomer base growth via subsidiaries and organic growth