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FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview 31.03.14.

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Presentation on theme: "FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview 31.03.14."— Presentation transcript:

1 FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview

2 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 2 Net Profit and ROE NIS Millions * Assuming core capital ratio of (9.17%), the Israeli banking industry average core capital ratio (Other 4 leading Banks) as of , the ROE is 7.6% in Q ** The Net profit includes amortization of 13 NIS Millions, inflicting a 0.8% reduction in the ROE. Average capital Core capital adequacy ratio Basel III 6, % 6, %+ ROE 141 NIS Millions

3 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 3 Statements of income Q1/2014 – Q1/2013 NIS Millions Change in % Gross change 1-3/ /2014 (1.3%)(7)544537Interest income, net (68.8%)(22)3210Expenses from credit losses (0.06% provision rate) (2.9%) Net interest income after expenses from credit losses 7.0%(30)427397Total non-interest income (46.1%)(35)7641Of which: non-interest financing 9.4% - 32 (25) (25) Commissions (Without the effect of initial implementation of FAS 91) FAS 91 effect (18.2%)(2)119Other Income (1.6%)(15)939924Total income (after expenses from credit losses) 2.4% Total operating and other expenses (13.6%)(32)235203Profit before taxes (18.1%)(19)10586Provision for taxes on profit (27.3%)(3)118 The bank’s share in profit of equity-basis investees, after taxes (11.8%)(16)136120Net profit 8.5%7.2%ROE -9.73%Core capital ratio (end of period) (0.83%) 1.75%0.92%Bank of Israel average interest rate

4 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 4 Income from Financing Activities (before Tax) Q1/ Q1/2013 NIS Millions Change (%) Gross change 1-3/ /2014 (1.3%)(7) Net interest income (46.1%)(35)7641 financing income Non-interest (6.8%)(42) Total income from interest and non-interest (11)10(1) Of which: Financing income (expenses) deriving from investments abroad (21)19(2) Reconciliations to fair value of derivative instruments (1.7%)(10) Total profit from actions of financing (interest and non-interest) (8.1%)(6)7468 Income from realization of bonds and shares 5.0%36063 Income from realization and reconciliations to fair value of bonds and Provision for writedown of securities (64.3%)(9)145 Earnings from investments in shares (0.8%)(4) Other financial income of financial intermediation and unoccupied capital (0.83%)1.75%0.92% Bank of Israel average interest rate

5 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 5 Operating & Other Expenses (NIS Millions) 1-3/ / * * Including amortization of 13 NIS Millions in Q1/14. Continued budgetary restraint trend - significant decrease (2.6%) in operating expenses in comparison to Q1/ % 7.5% % Mainly due to commissions paid in relation to capital market operations 4 3.7% %-

6 FIBI FIRST INTERNATIONAL BANK OF ISRAEL Consolidated Operational Efficiency Ratio Total Operating Expenses to Total Income % Total Income Total Operating Expenses % % Total Operating Expenses / Total Income (Before Expenses for credit losses) Total Operating Expenses / Total Income (After Expenses for credit losses) % %

7 FIBI FIRST INTERNATIONAL BANK OF ISRAEL Capital Adequacy Basel III Basel III Core Capital Adequacy Basel III Deposits to Credit Ratio Liquid Assets to Deposits Ratio 14.48%14.78% 9.73%10.11% 134.2%129.7% 40.0% 38.4% Capital Notes 5.6 Capital Available for Investment 4.9 Public Deposits 91.1 Gov. & Bank Bonds 2.1 Credit to the Public 67.9 State of Israel Bonds 6.9 Bank of Israel Deposits 24.8 Corporate Bonds (foreign & Israel currency) 0.7 Structures, Hedge funds &Stocks 0.7 Market risk in VAR(0.03) (*) illustration – not to scale 7 FIBI Strategic Assets & Liabilities composite (*) (NIS Billions) FIBI Strategic Assets & Liabilities Structure NIS Billions

8 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 8 An increase in total balance sheet NIS Billions 4.1% 5.1% 1.3%

9 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 9 Statement Of Changes in Equity Q1/2014 NIS Millions 7,120 Balance At 31/12/13 Total Shareholders Equity (non-controling interests (Including 120 Net Earnings (230)Dividend 13 Movement in the capital reserve of available for sale securities and non-controling interests 7,023 Balance At 31/3/14 Total Shareholders Equity (non-controling interests (Including Core capital ratio (Basel III, 31/3/14) was 9.73%, compared to % ( ) following dividend distribution. The Highest dividend yield in the Israeli banking system Dividend yield of 3.5% in 2013, 4% in 2014 and 7.51% for the past 12 months

10 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 10 Credit to the Public by segments NIS Millions Gross Change Compared to %1.0%15,77816,39016,560 Private + Retail (Households) 5.9%0.6%16,54517,42717,527 Mortgage 5.5%0.8%32,32333,81734,087 Total private clients (2.6%)(1.0%)13,15912,94312,814 Commercial + Small Business (4.3%) 21,93921,94620,993 Corporate 0.7%(1.2%)67,42168,70667,894 Total Credit to the Public () – (23%) (19%) (33%) (25%)

11 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 11 Provisions for Credit losses 2007-I/2014 *In Q1/2013 the Bank has implemented a one time regulatory provision on its 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 group’s ratio in 2013 was 0.11%. Expenses for Credit Losses to Credit to the Public Ratio *

12 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 12 Breakdown of credit for problematic debts NIS Millions Total Off balance sheet Balance sheet Total Off balance sheet Balance sheet 1, ,0121, Impaired credit risk Inferior credit risk , Credit under special supervision risk 2, ,5052, ,443 Total problem credit risk 79.5% Ratio of credit loss allowance for credit to the public to total impaired credit to the public not accruing interest income (excluding mortgages) - NPL The highest rate in the Israeli banking system

13 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 13 Deposits from the Public breakdown by segments NIS Millions Change in % Compared to (5.7%)(0.2%)27,48725,97025,917 Private Banking 3.0%(1.0%)23,15124,07923,848 Retail (Households) 6.4%1.5%10,55611,07411,235 Commercial + Small Business 41.8%7.5%21,22427,99930,103 Corporate 10.5%2.2%82,41889,12291,103 Total () – (13%) (33%) (28%) (26%)

14 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 14 Change in % Gross Change Total Average balances NIS Millions consolidated % 6,85382,17989,032 Total Deposits 16.9% 33,563198,474232,037 Securities clients portfolio 14.4% 40,416280,653321,069Total Client Assets Continued growth in client assets portfolio (deposits and securities) average balances NIS Millions

15 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 13.42% * 14.30% 14.57% 13.42% * * * ** * -1.3 *** Minimal Regulatory Requirement For HAPOALIM&LEUMI Minimal Regulatory requirement Gap Core Capital Ratio Basel II ** Basel III % % % Note: The core capital ratio in banks is according to Basel III.

16 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 16 Subsidiaries net profit Growth centers Core Capital Ratio ROE Net profit 1-3/2014 Nis Millions Specialization Extension of the agreement with Hever Participating in the new Small Business Fund operations and development of new initiatives in this field 9.75% 9.5% 25.4  Retail customers  Commercial/ Corporate  Defense forces personnel  Factoring Expansion activities with private and institutional clients 15.80% 10.2% 10.4  Capital Markets, Trust & Custody services  Private & affluent banking Winning in the teachers loans tender Growth at the Israeli- Arab sector 15.06% 9.0% 10.2  Retail customers  Teachers sector  Israeli-Arab sector Increasing network coverage in the ultra orthodox sector including new branches opening 12.30% 7.5% 6.5  Ultra orthodox sector

17 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 17 Highlights for the first quarter of 2014 Fair Value of derivatives Income from interest & inflation Substantial Macro & Accounting effect n The Interest income were influenced by the decline in bank of Israel interest rate in the period (0.83%) and the effect of the negative CPI on the CPI-linked positions n Expense for Fair Value of derivatives for the quarter compared to Income last period (timing differences) led to a decrease in financial income by approximately 21 NIS Million. FAS 91 n Increased financial income by approximately 21 NIS Million with a corresponding reduction of approximately 25 NIS million in income from commission, led to a decrease in profit of about 2 NIS million. Continued investment growth n Continued growth in client assets portfolio (deposits and securities) of 40 NIS billion (14%) Innovation in capital markets n New product and services launch (i.e. the investment radar, Duchifat trading platform, etc.) Growth in the other operating income n An increase of 9.4% in income from commissions (excluding the impact of FAS 91), related to growth in client activity (especially in capital markets) Continued growth in activity Subsidiaries n Continuing development of corporate clients through the Small Business Fund n Focus in growth segments

18 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 18 Highlights for the first quarter of 2014 n Dividend of 230 NIS million in the first quarter of 2014 n Dividend yield Dividend yield of 3.5% in 2013, 4% in 2014 and 7.51% for the past 12 months The Highest dividend yield in the Israeli banking system n Operating expenses growth rate of only 2.4% in comparison to Q1/13 n Mainly resulted by an increase in salaries and in capital markets related commissions credit portfolio quality and diversification Moderate increase in operating expenses n Decrease in provisions for credit losses % (0.14% on 2013). n Ratio of credit loss allowance to total impaired credit is the highest in the system % Decrease in provisions for credit losses NPL (excluding mortgages) consistent budgetary restraint Moderate increase in operating expenses n Continued budgetary restraint trend - significant decrease (2.6%) in operating expenses in comparison to Q1/11 High financial stability Core Capital Ratio n The highest in the Israeli banking system (also under Basel III)- 9.73% Deposits to credit ratio n Deposits to credit ratio – 134.2%


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