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FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview 30.06.14.

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Presentation on theme: "FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview 30.06.14."— 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 equity capital (tier 1) to risk components ratio (9.35%) in the Israeli banking industry average (Other 4 leading Banks) as of , the ROE is 8.9% in H and in Q %. ** The Net profit includes annual amortization of 52 NIS Millions, reflecting an 0.8% reduction on the ROE. Average capital equity capital (tier 1) to risk components ratio 6, % 6, %+ ROE 141 NIS Millions 8.8% 9.7%* 9.2% 6,607 6,840 7% 2.8%+

3 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 3 Statements of income H1/2014 – H1/2013 ((NIS Millions Change in % Gross change H1/2013H1/2014 (1%)(11) 1,0951,084 Interest income, net (93%)(41) 443 Expenses from credit losses (0.01% provision rate) 3%30 1,0511,081 Net interest income after expenses from credit losses (4%)(30) Total non-interest income (36%)(49) Of which: non-interest financing 6% - 41 (49) (49) Commissions (Without the effect of initial implementation of FAS 91) FAS 91 effect 169% Other Income (Including realization of FIBI London 31 NIS Million against previous year profit from sale of buildings) -- 1,895 Total income (after expenses from credit losses) -6 1,4201,426 Total operating and other expenses (1%)(8) Of which: Salaries and related expenses Maintenance and depreciation of premises and equipment (3%)(3) 8784 Amortizations and impairment of intangible assets 6% Other expenses (1%)(6) Profit before taxes (3%)(7) Provision for taxes on profit (27%)(6) 2216 The bank’s share in profit of equity-basis investees, after taxes (2%)(5) Net profit 8.8%8.3% ROE (*)10.00% Equity capital (tier 1) to risk components ratio (end of period) (0.82%) 1.65%0.83%Bank of Israel average interest rate (*) Equity capital (tier 1) ratio is 10.11% on

4 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 4 Income from Financing Activities (before Tax) ( H1/ H1/2013 (NIS Millions Change (%) Gross change H1/2013H1/2014 (1.0%)(11)1,0951,084 Net interest income (36.2%)(49)13889 financing income Non-interest (4.9%)(60)1,2331,173 Total income from interest and non-interest (12)10(2) Of which: Financing income (expenses) deriving from investments abroad (46) 37 (9) Reconciliations to fair value of derivative instruments (0.2%)(2)1,1861,184 Total profit from actions of financing (interest and non-interest) (7.5%)(11) Income from realization of bonds and shares 7.35% Income from realization and reconciliations to fair value of bonds and Provision for writedown of securities (50.0%)(19)3819 Earnings from investments in shares 0.9%91,0391,048 Other financial income of financial intermediation and unoccupied capital (42) - FAS 91 effect on financing income (3.2%)(33)1,0391,006 Other financial income of financial intermediation and unoccupied capital (0.82%)1.65%0.83% Bank of Israel average interest rate

5 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 5 Statements of income Q2/2014 – Q2/2013 (NIS Millions) Change in % Gross change Q2/2013Q2/2014 (1%)(4) Interest income, net (19) 12((7 Expenses from credit losses (0.01% provision rate) 3% Net interest income after expenses from credit losses Total non-interest income (23%) (14) (18) ((7 Of which: non-interest financing Of which: Reconciliations to fair value of derivative instruments 2.9% - 10 (25) (25) Commissions (Without the effect of initial implementation of FAS 91) FAS 91 effect Other Income (Including realization of FIBI London 31 NIS Million against previous year profit from sale of buildings) 2% Total income (after expenses from credit losses) (2%)(11) Total operating and other expenses 11% Profit before taxes 12% Provision for taxes on profit (27%)(3) 118 The bank’s share in profit of equity-basis investees, after taxes 7% Net profit 9.3%9.7% ROE (0.80%)1.55%0.75% Bank of Israel average interest rate

6 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 6 Operating & Other Expenses (NIS Millions) 1-6/ / * * Including amortization of 26 NIS Millions in H1/14. VAT increase resulted in an increase in expenses of about 11 NIS million % Without the increase in commissions paid in relation to capital market operations Expenses rate increases only by 0.1% 1 3

7 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 73.1% 72.6% 74.0% 74.9% 75.1% 75.3% 73.2% 74.9% 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

8 FIBI FIRST INTERNATIONAL BANK OF ISRAEL Capital Notes 5.6 Capital Available for Investment 5.1 Public Deposits 90.7 Gov. & Bank Bonds 2.0 Credit to the Public 67.8 State of Israel Bonds 8.0 Bank of Israel Deposits 23.3 Corporate Bonds (foreign & Israel currency) 0.9 Structures, Hedge funds &Stocks 0.6 Market risk in VAR(0.03) (*) illustration – not to scale 8 FIBI Strategic Assets & Liabilities composite (*) (NIS Billions) FIBI Strategic Assets & Liabilities Structure (NIS Billions) capital to risk assets Total ratio equity capital (tier 1) to risk components ratio Deposits to Credit Ratio Liquid Assets to Deposits Ratio 14.78% 10.00%10.11% 133.7%129.7% 39.2%38.4% capital available for Investments to investment capital Ratio 30.9%28.2%

9 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 9 Statement Of Changes in Equity H1/2014 ((NIS Millions 7,120 Balance At 31/12/13 Total Shareholders Equity (non-controling interests (Including 280 Net Earnings (230)Dividend 10 Net profit Attributed to non-controlling interests 7,180 Balance At 30/6/14 Total Shareholders Equity (non-controling interests (Including Equity capital (tier 1) ratio (Basel III, 30/6/14) is 10.00%, compared to % ( ) following dividend distribution. The Highest dividend yield in the Israeli banking system Dividend yield of 3.5% in 2013, and 4% in 2014.

10 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 10 Credit to the Public by segments (NIS Millions) Average balances growth rates compared to the average H1/2013 Gross Change Compared to % 4.8% 15,63216,380 Private + Retail (Households) 6.4% 5.8% 16,82617,809 Mortgage 5.7% 5.3% 32,45834,189 Total private clients (1.8%) ((5.0% 21,97320,881 Corporate (3.1%) (2.0%) 13,03012,765 Commercial + Small Business 1.5% 0.6% 67,46167,835 Total Credit to the Public () – (23%) (19%) (33%) (25%)

11 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 11 Provisions for Credit losses 2007-H1/2014 *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 Deposits from the Public breakdown by segments ((NIS Millions Average balances growth rates compared to the average H1/2013 Gross Change Compared to (2.4%)(2.8%) 49,29147,912 Total private clients 37.5%39.8%22,03730,800 Corporate 4.6%6.9%11,20511,974 Commercial + Small Business 9.0%9.9%82,53390,686 Total () – (13%) (60%) (27%)

13 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 13 14% 9% 15% Continued growth in client assets portfolio (deposits and securities) - average balances ( NIS Billions)

14 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 Equity capital (tier 1) ratio 14 % % %

15 FIBI FIRST INTERNATIONAL BANK OF ISRAEL.*In annual terms ** Calculated only on the balance sheet credit. *** Including dividend paid on the last 12 months % 9.53% 9.34% 9.20% 9.00% equity capital(tier 1) to riskcomponentsratio 133.7% 106.7% 114.5% 126.2% 103.3% Deposits from the public to credit to the public 73.1% 62.2% 79.7% 86.9% 59.0% Total operating expenses / Revenue (before credit losses expenses) 90.6% 53.2% 67.4% 62.9% 66.7% NPL-Provision for credit losses to total impaired credit (without mortgages) Other 4 leading Banks Average 9.35%111.5%72.0%60.4% 15 FIBI is demonstrating relative strength in main financial ratios Q2/2014 ***4.0% 1.56% % Dividend yield (according to )* - (0.04%) (0.00%) (0.03%) (0.12%) 0.06% Expenses for credit losses to credit to the public* ((0.02%

16 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 16 Subsidiaries net profit Growth centers equity capital (tier 1) to risk components ratio ROE Net profit 1-6/2014 Nis Millions Specialization Extension of the agreement with Hever Renewal of activities with Small Business Fund 9.83% 7.2% 39.3  Retail customers  Commercial/ Corporate  Defense forces personnel  Factoring Expansion activities with private and institutional clients Developing wealthy clients branches 16.30% 10.9% 22.8  Capital Markets, Trust & Custody services  Private & affluent banking Winning in the teachers loans tender Growth at the Israeli- Arab sector 14.86% 9.1% 20.9  Retail customers  Teachers sector  Israeli-Arab sector Increasing network coverage in the ultra orthodox sector including new branches opening 12.70% 10.0% 17.7  Ultra orthodox sector

17 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 17 Highlights for the first half of 2014 Q2/2014 H1/2014 Net profit n Net profit of 280 NIS million and ROE of 8.3% (Assuming adjustment of equity capital (tier 1) to risk components ratio to the Israeli banking industry average, the ROE is 8.7%) n Net profit of 160 NIS million and ROE of 9.7% (Assuming adjustment of equity capital (tier 1) to risk components ratio to the the Israeli banking industry average, the ROE is 10.1%) Income from interest & inflation Substantial Macro & Accounting effects n The Interest income was influenced by a decline in the bank of Israel interest rate in the period (0.82%) and an effect of the negative CPI on the CPI-linked positions n Expense for Fair Value of derivatives for the H1/2014 compared with H1/2013 (timing differences) resulted a decrease in financial income of approximately 46 NIS Million. FAS 91 n FAS 91 led to a decrease in profit of about 5 NIS million, due to an increase in financial income by approximately 42 NIS Million corresponding with a reduction of approximately 49 NIS million in income from commissions. Fair Value of derivatives

18 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 18 Highlights for the first half of 2014 Continued growth in customer’s capital markets activity n Continued growth in client assets portfolio (deposits and securities) of 39 NIS Billion (14%) Growth in operating income n An increase of 5.9% in income from commission (adjusted to FAS 91), mainly due to an increase in clients activity in capital markets Implementation of customer centric approach by consolidating all dealing rooms n Aimed at providing response and an overall view of all clients needs in the field of investment and passive Continued growth in activity Subsidiaries n Continued development of corporate clients through the Small Business Fund n Focus in growth segments (Ultra-Orthodox, teachers, security forces, Arab sector) n Operating expenses growth rate of only 0.4% in comparison to H1/13 n Mainly resulted by an increase in VAT and in expenses related to capital markets Moderate increase in operating expenses consistent budgetary restraint Moderate increase in operating expenses n Continued expenses restraint trend – no growth as of H1/2011 (3 years) n Divestment of FIBI London in Order to focus on core banking activities in Israel which increased net profits by 26 NIS Millions n Organizational changes in the management of the Bank and its subsidiaries (reducing the number of divisions and management members) n Merging of branches and reducing the branches size n Merging of the portfolio management company of FIBI and UBANK

19 FIBI FIRST INTERNATIONAL BANK OF ISRAEL 19 Highlights for the first half of 2014 n Dividend of 230 NIS million in the H1/2014. n Dividend yield of 3.5% in 2013, 4% in 2014 The Highest dividend yield in the Israeli banking system credit portfolio quality and diversificatio n n A collection of written off debts brought the expenses from credit losses to decrease - H1/2014 provision rate amounts to 0.01% while H1/2013 provision rate amounted to 0.13%. n At Q2/2014 Collection of debts written off brought to income from credit losses. n Ratio of credit loss allowance to total impaired credit is the highest in the system – 90.6% (excluding mortgages), 108.6% including mortgages. Decrease in provisions for credit losses NPL (excluding mortgages) High financial stability equity capital (tier 1) n The highest in the Israeli banking system (under Basel III) % higher then Bank of Israel target Deposits to credit ratio n Deposits to credit ratio – 133.7%


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