Presentation on theme: "FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview 31.12.14."— Presentation transcript:
FIBI FIRST INTERNATIONAL BANK OF ISRAEL O verview 31.12.14
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 2 Net Profit and ROE (NIS Millions) *Assuming equity capital (tier 1) to risk components ratio of the Israeli Other 4 leading Banks average the ROE is 7.4% in 2014. Additionally, regulation and new wage agreement in LEUMI further reduced the ROE by 0.7%. The annual net income including amortization of 52 NIS millions of investment in subsidiaries, further reduced the ROE by 0.8%. **ROE in Q4/2014 was affected by the regulatory implementation and the implementation of LEUMI wage agreement which lowered ROE by 2.4% in annual terms. Average capital Equity capital (tier 1) to risk components ratio 6,812 9.73% 6,715 3.4%+ 8.5% 3.5%** 8.4% 6,591 6,886 2.5%+ 8.4% ROE 9.98% 6,974 1.3%+
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 3 One-time effects including regulation in financial terms on Q4/2014 and 2014 Future Effects Q4/20142014 Effect on the decrease in profit (NIS Millions) GrossNetGrossNet Increase safety cushion for credit 45284528 Implementation of Bank of Israel directives regarding group provision Lower depreciation expense in future 531811 Implementation of Bank of Israel instructions regarding software costs Reducing future rise of salary expenses and inflicts a decrease in the provision (of about 108 NIS Millions). From this amount the effect of vacation and sick leave payments in respect of retirement will be deducted. 16101610 Implementation of the new LEUMI Salaries agreement 66417949 Total 2.4%0.7% ROE effect in annual terms
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 4 Statements of income 2014 –2013 ((NIS Millions Change in % Gross change 20132014 (5.8%)(139)2,3872,248 Interest and non Interest Incomes (8.2%)(8)9789 (Income) Expenses from credit losses (0.13% income provision rate) (39.7%)(79)7344 Of which: Expenses from credit losses - excluding Group provisions (rate of 0.06%) (3.7%)(78)2,0902,012 Interest income after Expenses from credit losses (0.9%)(15)1,6821,667 Non interest income 3.7%53 1,4181,471 Of which: Commissions * 11.7%68 571638 Of which: Commissions for clients activity in the capital market 10.8%11 102113 Expenses from capital market Commissions 0.0%12,7482,749 Total operating and other expenses (Excluding Commissions for customer activity in the capital market and the effect of the Salaries agreement LEUMI Bank ) 16- The effect of the Salaries agreement LEUMI Bank (13.1%)(121)922801 Profit before taxes (9.6%)(36(376340 Provision for taxes on profit 16.7%53035 The bank’s share in VISA CAL profit (13.9%)(77)555478 Net profit 8.5%7.0% ROE 9.98%9.73% Equity capital (tier 1) to risk components ratio (end of period) (0.8%)1.4%0.6% Bank of Israel average interest rate * Excluding the effect of FAS 91 implementation which increased the net interest income by 83 NIS Millions and reduced commissions in 96 NIS Millions.
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 5 Main changes in net profit ( 2014 - 2013 (NIS Millions Net change Gross change 20132014 86 43 (7) 68 (11) 571 (102) 638 (113) An Income increase from capital market commissions Net increase in commissions paid 2631- Capital gain on sale of FIBI London shares 15 (28) 8 (45) (97)(89) (45) Decrease in expenses from credit losses Of which: the effect of the Supervisor of Banks instructions in the matter of - Group basis provision in respect to consumer credit to private individuals positive influences
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 6 Net change Gross change 20132014 (163) (50)(82)2,0731,991 Interest income, net (the effect of the Decrease in Bank of Israel interest rate) (34) The effect of last year increase in tax rate on deferred tax balances (30)(48)502 Net decrease in the reconciliations in fair value of derivative instruments (21)(36)9155 Decrease in other income (Decrease in the Realization of fixed assets last year and funding's of the severance pay profits) (8) The effect of FAS 91 implementation Negative influences Total decrease of 77 Nis millions in net profit Main changes in net profit ( 2014 - 2013 (NIS Millions
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 7 Statements of financing income 2014 –2013 ((NIS Millions Net change Gross change 20132014 (3.9%)(86)2,1872,101 Total Interest income 15.0%30200230 Total non-interest financing income (2.3%)(56)2,3872,331 Interest income and non-interest financing (7)5(2) Of which: Hedging fluctuations in the tax provision regarding FIBI London (48)502 Fair value of derivatives (0.0%)(1)2,3322,331 Total income from financing (interest and non-interest) (0.8%)(2)259257 Profits from the sale of bonds and trading portfolio 13.2%23174197 Profits from sale of bonds and trading portfolio (29.4%)(25)8560 Profits from sale of shares (0.0%)12,0732,074 Other financial income and financial intermediation free capital (83) - FAS 91 influence on Interest income and non-interest financing (82)2,0731,991 Other financial income and financial intermediation free capital (0.8%) 1.4%0.6% Bank of Israel average interest rate
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 8 Statements of income Q4/2014 –Q4/2013 ((NIS Millions Change in % Gross change Q4/2013Q4/2014 (6.9%)(41)594553 Interest and non Interest Incomes (2.0%)653297 (Income) Expenses from credit losses (0.56% income provision rate Including 45 NIS millions for Group provision in 2014) (20.1%)(101)502401 Interest income after Expenses from credit losses (4.2%)(19)448429 Non interest income 1.9%7 368375 Of which: Commissions * 9.9%15 152167 Of which: Commissions for clients activity in the capital market 10.3%3 2932 Expenses from capital market Commissions -(18) 202 Decrease in other income (mainly funding's of the severance pay profits) (2.7%)(19)698679 Total operating and other expenses (Excluding Commissions for customer activity in the capital market and the effect of Bank LEUMI Salaries agreement) 16- The effect of Bank LEUMI Salaries agreement (53.8%)(120)223103 Profit before taxes (47.7%)(42(8846 Provision for taxes on profit 0.0%-77 The bank’s share in VISA CAL profit (55.1%)(75)13661 Net profit 8.4%3.5% ROE (0.75%)1.00%0.25% Bank of Israel average interest rate * Excluding the effect of FAS 91 implementation that increased the net interest income by 19 NIS Millions and reduced their income from commissions in 22 NIS Millions, 2 million effect on the net profit.
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 9 Operating & Other Expenses (NIS Millions) 2014 2013 18 * (Including amortization of 52 NIS Millions per year) 28 1.0% 10 Excluding the increase in fees paid and the effect of LEUMI agreement stability in operating expenses (the effect of the new LEUMI wage agreement is amounted to 16 NIS Millions. 60% of the Salaries expenses in FIBI are Related to LEUMI.
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 73.7% 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) 10 76.4%
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 11 Statement Of Changes in Equity 2014 ((NIS Millions 7,025 Balance At 31/12/13 Total Shareholders Equity 478 Net Earnings 18Net profit Attributed to non-controlling interests (25)Change in capital reserve (285)Dividend 7,211 Balance At 31/12/14 Total Shareholders Equity (non-controIling interests (Including Equity capital to risk components ratio (Basel III) 31.12.1331.12.14Ratio of capital to risk assets 9.98%9.73%Tier 1 14.66%14.27%Total
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 12 Credit to the Public by segments (NIS Millions) Rates of change in average balances compared to the average in 2013 31.12.1331.12.14 4.0%16,37617,051 Private + Retail (Households) 6.1%17,42718,547 Mortgage 5.1% 33,80335,598Total private clients 0.9%21,81620,428 Corporate (1.2%)13,08712,931 Commercial & Small Business (3.8%)5,4425,221 Small Business 2.4% 68,70668,957 Total Credit to the Public 8.8% Our share in local activity (average for the period)
FIBI FIRST INTERNATIONAL BANK OF ISRAEL In 2002, the Bank focused primarily on business credit Credit mix in 2002 Today, the Bank's credit mix portfolio is well distributed and reflects the Bank's proportionate approach The share of credit to households, private banking and mortgages has increased significantly Credit mix in 12/2014 Development of the Group's Credit portfolio Total Credit – 69.0 Nis millionsTotal Credit – 47.6 Nis millions 13 Credit mix in 2013 Total Credit – 68.7Nis millions
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 14 * Excluding the regulatory impact this year and last year, the rate Provision for credit losses this year is 0.06%, compared to 0.11% in 2013 Expenses for Credit Losses to Credit to the Public Ratio * ** The data from Banks in 2014 is still presented without Bank Leumi. **
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 15 Deposits from the Public breakdown by segments (NIS Millions) Rates of change in average balances compared to the average in 2013 Gross Change Compared to 31.12.13 31.12.1331.12.14 (2.2%) *730 48,30149,031 Total private clients 26.5%4,525 20,68425,209 Corporate 17.3%778 20,13720,915 Commercial + Small Business 6.0%6,033 89,12295,155 Total () – 31.12.13 (23%) (54%) (23%) Deposits from the public to credit to the public, net 31.12.1331.12.14 129.7%138.0% * As a result of Transition clients fund to capital market investment
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 16 11.5% 7% 13% 330 296 34 28 6 Client assets portfolio (deposits & securities) present Continued growth (average balances, NIS Billions) Increase of 34 NIS Billions (11.5%) in client assets portfolio, A similar rate of increase in commissions from the capital market 273 8.4% 23 11% 21 2% 2 526 571 639 8.5% 12% clients activity in the capital market
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 13.42% * 14.30% 14.57% 13.42% * * * -1.3 -0.66% -0.71% 0.56%- Equity capital (tier 1) ratio 17 Equity ratio (Tier 1) all Banks are updated to 31/12/14, except Leumi that is updated to 30/9/14.
FIBI FIRST INTERNATIONAL BANK OF ISRAEL.*In annual terms ** Calculated only on the balance sheet credit. *** Including dividend paid during 2014. All Banks financial Ratios are updated to 31/12/14, except Leumi that is updated to 30/9/14 9.73% 9.29% 9.44% 9.12% equity capital(tier 1) to riskcomponentsratio 138.0% 112.6% 114.9% 127.3% 103.3% Deposits from the public to credit to the public 76.4% 65.2% 74.7% 85.3% 60.8% Total operating expenses / Revenue (before credit losses expenses) 96.1% 64.7% 72.5% 71.9% 98.3% NPL-Provision for credit losses to total impaired credit (without mortgages)** Other 4 leading Banks Average 9.34%113.8%71.5%70.4% 18 FIBI is demonstrating relative strength in main financial ratios 2014 ***5.1% 1.7% - - - Dividend yield - 1 3 2 2 4 1 2 3 4 5 1 2 4 3 5 2 5 3 4 1
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 19 Subsidiaries net profit Growth centers equity capital (tier 1) to risk components ratio ROE Net profit 2014 Nis Millions Specialization Extension of the agreement with Hever Renewal of activities with Small Business Fund Expansion of the factoring activity 9.7%4.2% 44.2 (The Influence of Group basis provision is amounted to 20 NIS, 1.4% ( in ROE terms Retail clients Commercial/ Corporate Defense forces personnel Factoring Expansion activities with private and institutional clients Developing wealthy clients branches 15.8%9.7%43.1 Capital Markets, Trust & Custody services Private & affluent banking Winning in the teachers loans tender Growth at the Israeli- Arab sector 14.5%7.5%36.2 Retail clients Teachers sector Israeli-Arab sector Increasing network coverage in the ultra orthodox sector 12.0%7.3%27.2 Ultra orthodox sector
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 20 n Divestment of FIBI London - Net capital gain of 26 NIS million. n Reduction in the management team members of FIBI and of subsidiaries n Merger of all portfolio management companies into one company. n U Bank – consolidation of headquarters functions (currently being implemented) n Reduction of one district headquarters Focus on planning the long term optimal branch deployment at the Group level: n In 2014 the group closed 4 branches and opened 3 new branches n During 2014 the group reduced its real estate areas by 2.2% a trend that is expected to continue in the coming years n Since 2009 the Group opened 21 branches as part due to demographic changes and elimination of duplications in the groups deployment. New branches are constructed in a more efficient manner. Major steps at FIBI group in 2014 - 2015 with an emphasis on efficiency Structural changes in the group Branch deployment Client Asset Management n Expansion and improvement in the range of investment and savings products due to the low interest environment n Unite the treatment with all clients assets under one division, while the comprehensive service to the customer (including consolidation of trading rooms) n Platinum system upgrade affluent to clients Improvements in the credit sector Processes improvements aimed at promoting cross-selling, increasing customer base and utilization of existing customers Expansion of direct banking channels and upgrade to business website Mortgage streamlining work processes and shortening branches improving customer response times Focus on promoting factoring activities
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 21 FIBI ‘s Technological innovation - Capital market trading system, Investment Radar, Upgrading and developing the website and clients -focusing banking Online personal clients oriented service A wide range of information and useful tips alerts Wide useful customer information Alerts in the life of the account Useful Tips "The investment radar" helps regular professional management of the client's investment portfolio Duchifat-Net - Advanced trading platform within the Bank's website with no dedicated software that support professional trading in the Israel and abroad A wide range of capital market trading options Buying and selling activities of securities in Israel and the United States and Europe. Short selling stocks and bonds in the country, buy / sell / write options in Israel and abroad. Other commercial functions Stop Loss in Israel and abroad. Scenarios and simulations derivatives collateral
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 22 Highlights for 2014 Equity to risk components ratio Net profit Main parameters n 2014 net profit - 478 NIS million, ROE - 7.0%. One-time regulation affected 0.7% of the ROE. n Q4/14 net profit - 61 NIS million. ROE is 3.5%. One-time regulation affected 2.4% of the ROE (41 NIS million) Equity to risk components ratio – 9.73% After a dividend distribution of 285 NIS million Continued growth in the investment sector Continued growth in activities n An increase of 34 NIS billion (11.5%) in the value of the Bank's customer portfolio, amounting to 330 NIS billion. n An increase of 5% in average credit balances of private and householders (including mortgages) in 2014 Growth in operating income n An increase of 3.7% in commissions (excluding FAS91). 12% increase in capital market commissions. Private credit growth
FIBI FIRST INTERNATIONAL BANK OF ISRAEL 23 Highlights for 2014 Macro and regulatory effects A moderate increase in expenses n Minimal increase of 1% in expenses. Excluding the one-time expenses – Stability n A decrease of 100 full-time employees in the the group compared to the end of 2013. Expenses for credit losses 0.13% compare to 0.14% last year Including the Implementation of the directives of the Supervisor of Banks Maintainin g the quality of the loan portfolio and dispersion NPL (Without mortgage) Decrease in the Expenses for credit losses n Rate of expenses for credit damaged non-interest is the highest in the banking system (excluding mortgages) 96.1%, including mortgages 110.7%. Lower interest rate n Led to a reduction in income margins, current accounts and deposits in FIBI group n This effect was partially offset by an increase in revenue margins, credit and mortgages and an increase in the volume of deposits Operating expenses restraint The high dividend yield in Israeli banking industrial n Distribution of a dividend of 285 NIS million. Including a dividend distribution of 55 NIS million on 11/14. n Dividend yield reached 3.5% in 2013 and 5.1% in 2014.