TEL AVIV, Israel , March 06, 2018 /PRNewswire/ — Highlights for 2017
- Increase of 30% in net earnings to NIS 678 million
- Return on equity: 9.1%
- Increase of 6.1% in net interest income
- Decrease of 2.8% in operating and other expenses
- Improvement to 69.5% in the efficiency ratio
- Ratio of Tier I capital to risk weighted assets: 10.38% at year-end 2017, compared with 10.09% at year-end 2016
- Ratio of total capital to risk weighted assets of 13.94%
- Distributed dividends of NIS 310 in 2017, representing an annual dividend yield of 4.9%
- Board of Directors declared dividend distribution of NIS 95 million for the fourth quarter of 2017
Profitability
First International Bank Group’s net earnings in the year 2017 increased by 30% in comparison to 2016, amounting to NIS 678 million. The return on equity was 9.1%.
In the fourth quarter of 2017, net earnings increased by 41% in comparison to the corresponding period in 2016, amounting to NIS 158 million. The return on equity was 8.4%.
Growth
Net interest income increased in 2017 by 6.1% in comparison to the previous year, amounting to NIS 2,302 million, the growth was due to the increase in volume of operations, mostly from the growth in the credit portfolio.
The growth of the Group was also apparent in the balance sheet data, both on the credit side and on the deposit side. The Bank’s customer assets portfolio grew by 12.8% (by approximately NIS 50 billion) and reached NIS 442 billion. Deposits by the public grew by 7.3% and credit to the public grew by 3.9%.
The growth in the credit portfolio was marked by the continued spread of credit. It was primarily noted in the private customer segment which grew by 8.5%. It was also noted in mortgages segment which grew by 5.1% and in credit granted to the small and middle business market segment, which grew by 6.0%.
The growth in the credit portfolio was achieved while maintaining an appropriate risk level: the ratio of credit loss expenses to total credit to the public in 2017 amounted to 0.15%.
Efficiency
The First International Bank continued to improve efficiencies in line with its strategic goals, and a decrease of 2.8% was noted in total operating and other expenses, which amounted to NIS 2,607 million. The reduction in expenses was reflected across all expense items.
Payroll and related expenses amounted in 2017 to NIS 1,627 million, representing a reduction of 1.8%. The efficiency trend can be noted in the decrease in the number of positions, which declined in 2017 by 3.7%, as well as a reduction in the office space in use by the Bank, which decreased in 2017 by 9%.
This decrease in expenses supports the gradual and consistent improvement in the efficiency ratio, which improved to 69.5% in 2017 as compared with 73.5% in 2016.
In 2017, the Bank sold its operations in Switzerland. The sale process led to a temporary increase in expenses relating to the closing down process and due to the reduction in income from the Swiss operations. The results of the sale are expected to positively contribute to improvements in the efficiency ratio in 2018.
Financial Stability
The upward trend relating to the capital attributed to the shareholders of the Bank continued, and grew by 5.9% (NIS 435 million) to NIS 7,756 million. The Tier I equity capital ratio increased to 10.38% in comparison to 10.09% as of December 31, 2016, and the total capital ratio increased to 13.94%.
In 2017, the Bank distributed dividends in the amount of NIS 310 million, representing a dividend yield of 4.9%. Furthermore, the Board of Directors of the Bank resolved on an additional dividend distribution of NIS 95 million for the fourth quarter.
Management Comment
Mrs. Smadar Berber-Tsadik, CEO of the First International Bank Group: “The financial results of the First International Bank for 2017 reflect the ongoing growth of the Group, as apparent in the consistent growth of the credit portfolio, in the deposits of the public and in the customer assets portfolio. Our growth trend has continued for a number of years, and we have demonstrated an average growth rate of over 5% per annum in the credit portfolio. I emphasize that we are achieving this growth while maintaining the quality of the Bank assets, an appropriate risk level, a healthy mix in the credit portfolio, and an increase in our loan book diversity. The strong capital ratios of the First International Bank enable this ongoing growth, while allowing us to continue to share dividends with our shareholders.
Continued Mrs. Berber-Tsadik, “Another positive trend reflected in our financial results, is the consistent and significant improvement in our efficiency ratios. This has been made possible by a combination of growing income with declining expenses. We continue to implement efficiency measures in accordance with our strategy of improvements in work procedures, merger of branches and Head Office units, and reduction in the number of positions. Looking ahead to 2018, we will continue to implement efficiency measures with the aim of ongoing gradual and consistent improvement in our efficiency ratios.
“The First International Bank maintains its leadership position in the capital market, both in the professional field and in the digital field. In 2017, we focused on unique and innovative digital developments, such as the cellular consulting system ‘ADVISE ME’, an upgraded capital market website and more. 2017 was also characterized by a significant improvement in the digital field as well as in our innovation, both in regards to the capital market as well as in the range of banking operations we provide. Our goal is the upgrade of the customer experience by providing our customers with advanced and efficient service channels, which complement the personal and professional services that we provide at our branches.”
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES |
||||||||||
Principal financial ratios |
2017 |
2016 |
2015 |
2014 |
2013 |
|||||
percent |
||||||||||
Execution indices |
||||||||||
Return on equity |
9.1% |
7.2% |
6.5% |
6.8% |
8.4% |
|||||
Return on assets |
0.5% |
0.4% |
0.4% |
0.4% |
0.5% |
|||||
Ratio of equity capital tier 1 |
10.38% |
10.09% |
9.81% |
9.69% |
9.98% |
|||||
Leverage ratio(1) |
5.50% |
5.52% |
5.43% |
|||||||
Liquidity coverage ratio(1) |
123% |
123% |
104% |
|||||||
Efficiency ratio |
69.5% |
73.5% |
77.6% |
77.3% |
74.3% |
|||||
Credit quality indices |
||||||||||
Ratio of provision for credit losses to credit to the public |
1.03% |
1.08% |
1.12% |
1.25% |
1.19% |
|||||
Ratio of impaired debts or in arrears of 90 days or more to credit to the public |
0.95% |
1.02% |
1.36% |
1.50% |
1.79% |
|||||
Ratio of provision for credit losses to total impaired credit to the public |
155% |
147% |
108% |
110% |
83% |
|||||
Ratio of net write-offs to average total credit to the public |
0.18% |
0.09% |
0.15% |
0.05% |
0.14% |
Principal data from the statement of income |
2017 |
2016 |
2015 |
2014 |
2013 |
|||||
NIS million |
||||||||||
Net profit attributed to shareholders of the Bank |
678 |
521 |
446 |
455 |
538 |
|||||
Interest Income, net |
2,302 |
2,169 |
1,953 |
2,101 |
2,187 |
|||||
Expenses from credit losses |
121 |
80 |
18 |
89 |
97 |
|||||
Total non Interest income |
1,450 |
1,480 |
1,541 |
1,667 |
1,664 |
|||||
Of which: Fees |
1,305 |
1,300 |
1,378 |
1,375 |
1,418 |
|||||
Total operating and other expenses |
2,607 |
2,683 |
2,710 |
2,912 |
2,860 |
|||||
Of which: Salaries and related expenses |
1,627 |
1,656 |
1,629 |
1,780 |
1,746 |
|||||
Primary net profit per share of NIS 0.05 par value (NIS) |
6.76 |
5.19 |
4.45 |
4.54 |
5.36 |
Principal data from the balance sheet |
2017 |
2016 |
2015 |
2014 |
2013 |
|||||
NIS million |
||||||||||
Total assets |
135,717 |
127,907 |
125,476 |
117,807 |
111,025 |
|||||
of which: Cash and deposits with banks |
39,186 |
29,150 |
30,727 |
29,182 |
26,100 |
|||||
Securities |
10,238 |
15,776 |
16,439 |
12,554 |
10,799 |
|||||
Credit to the public, net |
80,378 |
77,328 |
72,555 |
68,931 |
68,680 |
|||||
Total liabilities |
127,333 |
119,973 |
117,813 |
110,764 |
104,124 |
|||||
of which: Deposits from banks |
1,133 |
755 |
1,565 |
1,469 |
1,335 |
|||||
Deposits from the public |
113,511 |
105,817 |
103,262 |
95,155 |
89,122 |
|||||
Bonds and subordinated capital notes |
5,249 |
5,801 |
5,862 |
4,903 |
5,702 |
|||||
Capital attributed to the shareholders of the Bank |
7,756 |
7,321 |
7,073 |
6,797 |
6,673 |
Additional data |
2017 |
2016 |
2015 |
2014 |
2013 |
|||||
Share price (0.01 NIS) |
7,202 |
5,650 |
4,594 |
4,990 |
4,766 |
|||||
Dividend per share (0.01 NIS) |
309 |
199 |
130 |
284 |
199 |
|||||
Number of positions(2) |
4,451 |
4,623 |
4,858 |
5,114 |
5,214 |
|||||
Ratio of fees to assets |
1.0% |
1.0% |
1.1% |
1.2% |
1.3% |
|||||
(1) According to instructions of the Bank of Israel the Leverage ratio and the Liquidity coverage ratio were calculated since 2015. Therefor no comparative data is stated. |
STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31 |
||||||||||||||
Consolidated |
The Bank |
|||||||||||||
Note |
2017 |
2016 |
2015 |
2017 |
2016 |
2015 |
||||||||
Interest Income |
2 |
2,704 |
2,526 |
2,260 |
2,060 |
1,873 |
1,521 |
|||||||
Interest Expenses |
2 |
402 |
357 |
307 |
397 |
342 |
283 |
|||||||
Interest Income, net |
2 |
2,302 |
2,169 |
1,953 |
1,663 |
1,531 |
1,238 |
|||||||
Expenses from credit losses |
13,29 |
121 |
80 |
18 |
47 |
45 |
11 |
|||||||
Net Interest Income after expenses from credit losses |
2,181 |
2,089 |
1,935 |
1,616 |
1,486 |
1,227 |
||||||||
Non Interest Income |
||||||||||||||
Non Interest Financing income |
3 |
83 |
115 |
149 |
94 |
99 |
95 |
|||||||
Fees |
4 |
1,305 |
1,300 |
1,378 |
973 |
954 |
839 |
|||||||
Other income |
5 |
62 |
65 |
14 |
176 |
188 |
193 |
|||||||
Total non Interest income |
1,450 |
1,480 |
1,541 |
1,243 |
1,241 |
1,127 |
||||||||
Operating and other expenses |
||||||||||||||
Salaries and related expenses |
6 |
1,627 |
1,656 |
1,629 |
1,215 |
1,227 |
1,054 |
|||||||
Maintenance and depreciation of premises and equipment |
380 |
409 |
428 |
278 |
299 |
269 |
||||||||
Amortizations and impairment of intangible assets |
17 |
94 |
116 |
131 |
83 |
82 |
86 |
|||||||
Other expenses |
7 |
506 |
502 |
522 |
450 |
427 |
416 |
|||||||
Total operating and other expenses |
2,607 |
2,683 |
2,710 |
2,026 |
2,035 |
1,825 |
||||||||
Profit before taxes |
1,024 |
886 |
766 |
833 |
692 |
529 |
||||||||
Provision for taxes on profit |
8 |
358 |
398 |
326 |
284 |
301 |
213 |
|||||||
Profit after taxes |
666 |
488 |
440 |
549 |
391 |
316 |
||||||||
The bank’s share in profit of equity-basis investee, after taxes |
15 |
54 |
72 |
38 |
129 |
130 |
130 |
|||||||
Net profit: |
||||||||||||||
Before attribution to noncontrolling interests |
720 |
560 |
478 |
678 |
521 |
446 |
||||||||
Attributed to noncontrolling interests |
(42) |
(39) |
(32) |
– |
– |
– |
||||||||
Attributed to shareholders of the Bank |
678 |
521 |
446 |
678 |
521 |
446 |
Consolidated and The Bank |
Note |
2017 |
2016 |
2015 |
||||
Primary profit per share attributed to the shareholders of the Bank |
9 |
NIS |
||||||
Net profit per share of NIS 0.05 par value |
6.76 |
5.19 |
4.45 |
|||||
* The data for 2015 does not include the data for PAGI and UBank, which were merged in 2015 with and into the Bank, and were included in that year in the consolidated data. |
The notes to the financial statements are an integral part thereof.
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31(1) |
||||||
Consolidated |
||||||
2017 |
2016 |
2015 |
||||
Net profit before attribution to noncontrolling interests |
720 |
560 |
478 |
|||
Net profit attributed to noncontrolling interests |
(42) |
(39) |
(32) |
|||
Net profit attributed to the shareholders of the Bank |
678 |
521 |
446 |
|||
Other comprehensive income (loss) before taxes: |
||||||
Adjustments of available for sale securities to fair value, net |
90 |
14 |
(75) |
|||
Adjustments from translation of financial statements(2) net after the effect of hedges(3) |
4 |
(2) |
– |
|||
Adjustments of liabilities in respect of employee benefits(4) |
1 |
(131) |
11 |
|||
Other comprehensive income (loss) before taxes |
95 |
(119) |
(64) |
|||
Related tax effect |
(35) |
37 |
24 |
|||
Other comprehensive income (loss) before attribution to noncontrolling interests, after taxes |
60 |
(82) |
(40) |
|||
Less other comprehensive income (loss) attributed to noncontrolling interests |
3 |
(10) |
(2) |
|||
Other comprehensive income (loss) attributed to the shareholders of the Bank, after taxes |
57 |
(72) |
(38) |
|||
Comprehensive income before attribution to noncontrolling interests |
780 |
478 |
438 |
|||
Comprehensive income attributed to noncontrolling interests |
(45) |
(29) |
(30) |
|||
Comprehensive income attributed to the shareholders of the Bank |
735 |
449 |
408 |
|||
(1) See Note 10. |
The notes to the financial statements are an integral part thereof.
BALANCE SHEET AS AT DECEMBER 31 |
||||||||||
Consolidated |
The Bank |
|||||||||
Note |
2017 |
2016 |
2017 |
2016 |
||||||
Assets |
||||||||||
Cash and deposits with banks |
11 |
39,186 |
29,150 |
33,551 |
23,332 |
|||||
Securities |
12, 26 |
10,238 |
15,776 |
8,685 |
13,523 |
|||||
Securities which were borrowed |
813 |
414 |
813 |
414 |
||||||
Credit to the public |
13, 29 |
81,216 |
78,175 |
63,523 |
61,746 |
|||||
Provision for Credit losses |
(838) |
(847) |
(607) |
(653) |
||||||
Credit to the public, net |
80,378 |
77,328 |
62,916 |
61,093 |
||||||
Credit to the government |
14 |
675 |
654 |
– |
7 |
|||||
Investments in investee companies |
15 |
565 |
514 |
2,657 |
2,541 |
|||||
Premises and equipment |
16 |
1,095 |
1,133 |
991 |
1,019 |
|||||
Intangible assets |
17 |
235 |
243 |
222 |
219 |
|||||
Assets in respect of derivative instruments |
27A, 27B |
1,342 |
1,332 |
1,363 |
1,342 |
|||||
Other assets(2) |
18 |
1,186 |
1,020 |
1,030 |
784 |
|||||
Assets held for sale |
18A |
4 |
343 |
2 |
45 |
|||||
Total assets |
135,717 |
127,907 |
112,230 |
104,319 |
||||||
Liabilities, temporary equity and Shareholders’ Equity |
||||||||||
Deposits from the public |
19 |
113,511 |
105,817 |
91,035 |
84,403 |
|||||
Deposits from banks |
20 |
1,133 |
755 |
4,168 |
3,576 |
|||||
Deposits from the Government |
960 |
570 |
817 |
296 |
||||||
Bonds and subordinated capital notes |
21 |
5,249 |
5,801 |
3,637 |
4,019 |
|||||
Liabilities in respect of derivative instruments |
27A, 27B |
1,318 |
1,356 |
1,322 |
1,356 |
|||||
Other liabilities(1)(3) |
22 |
5,162 |
4,929 |
3,157 |
3,018 |
|||||
Liabilities held for sale |
18A |
– |
745 |
– |
– |
|||||
Total liabilities |
127,333 |
119,973 |
104,136 |
96,668 |
||||||
Temporary equity – noncontroling interests |
338 |
330 |
338 |
330 |
||||||
Capital attributed to the shareholders of the Bank |
7,756 |
7,321 |
7,756 |
7,321 |
||||||
Noncontrolling interests |
290 |
283 |
– |
– |
||||||
Total equity |
8,046 |
7,604 |
7,756 |
7,321 |
||||||
Total liabilities, temporary equity and shareholders’ equity |
135,717 |
127,907 |
112,230 |
104,319 |
||||||
(1) Of which: provisions for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 61 million and NIS 71 million (consolidated) and NIS 54 million and NIS 62 million (the Bank) as of December 31, 2017 and 2016, respectively. |
The notes to the financial statements are an integral part thereof.
For more information, visit http://www.fibi.co.il
Contact:
Dafna Zucker,
Spokeswoman and IR Officer FIBI
[email protected]
+972-3-5196219
Investor Relations Contact:
Ehud Helft/Gavriel Frohwein
Tel: +1-646-688-3559
[email protected]
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SOURCE FIBI-First International Bank of Israel Ltd.