New national record: Triple net income in 2021

Bank Leumi became profitable in Israel, with a net profit of about NIS 6 million in 2021, a figure that is especially amazing compared to 2020, when the net profit was NIS 2.1 billion.

A great year for shareholders as well, with a dividend of close to NIS 600 million, in addition to the 2 billion already distributed for the previous quarters

Walla!

Of money

09/03/2022

Wednesday, 09 March 2022, 08:34 Updated: 08:57

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The following sentence has been written several times in the past week, but when it comes-comes: the peak performance of the Israeli economy in 2021 is well reflected in the reports of the financial sector, headed by the banks.

And if we are talking about banks, then something has happened: after Bank Hapoalim presented wonderful annual results yesterday with a net profit of close to NIS 5 billion, now came the results of Bank Leumi showing an even higher net profit: about NIS 6 billion in 2021. It was said In non-economic language: Wow!

Leumi concludes 2021 with a record performance and a cumulative dividend of NIS 2.6 billion, an impressive growth in the credit portfolio - 16.1%, a significant improvement in the efficiency ratio - 46.8% and a return on capital - 15%.

In light of the excellent results, the Bank's Board of Directors approved a dividend of NIS 588 million, in addition to a cumulative dividend of NIS 2 billion distributed for the first nine months of the year.

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Chairman of Bank Leumi, Summer Haj Yahya (Photo: Studio Srur)

Prominent data from the report

> Net profit in 2021 amounted to NIS 6 billion, compared with NIS 2.1 billion in 2020. Net profit in the fourth quarter of the year amounted to NIS 1.5 billion, compared with NIS 0.9 billion in the corresponding quarter last year.

The return on equity in 2021 was 15%, compared to a return of 5.7% in 2020. The return on equity in the fourth quarter of the year was 14.8%, compared to 9.8% in the corresponding quarter last year.

The significant increase in return on capital is mainly due to a significant increase in income along with a moderate increase in expenses, and a reduction in the provision for credit losses compared with a significant increase in expense for credit losses in the corresponding period last year.

Dividend - The Bank's Board of Directors approved a dividend of NIS 588 million, which constitutes 40% of the net profit for the fourth quarter of 2021, in addition to a dividend of a cumulative NIS 2 billion in the second half of the year.

> Credit portfolio growth - The Bank continued to focus its growth in the credit portfolio in the business, commercial and mortgage sectors.

In 2021, the credit portfolio grew at a total rate of 16.1%.

The business portfolio grew by about 20%, the commercial portfolio grew by 15.2%, and the mortgage portfolio grew by 14.5%.

In addition, thanks to the use of advanced and digital models, credit to private customers has increased by about 10%.

> Expenses (income) for credit losses - In 2021, income was recorded at a rate of 0.25% of the average balance of credit to the public, compared with an expenditure rate of 0.88% in 2020. Income in 2021 comes from both the individual provision - mainly as a result of collections - and the group provision. The economic expansion of the economy, the decrease in the disease state and the improvement in the macroeconomic parameters.

In the fourth quarter of 2021, income was recorded at a rate of 0.1% of the average balance of credit to the public, compared with expenditure at a rate of 0.37% in the corresponding quarter last year.

Revenue in the fourth quarter of the year came mainly from collections.

> Net interest income in 2021 amounted to NIS 10.3 billion, an increase of 18.6% compared to 2020. The increase in interest income is mainly a result of the increase in the Bank's credit portfolio and the index gaps between the periods, which were partially offset by the Fed's interest rate and Bank of Israel interest rates. .

Non-interest financing income in 2021 amounted to NIS 1.7 billion, compared with NIS 1 billion in 2020. Most of the increase in income comes from profits from the sale of Retailers and Ironsource shares, as well as from the effect of derivatives and exchange rate differences.

> The efficiency ratio in 2021 decreased to 46.8%, compared to 53.8% in 2020. The efficiency ratio in the fourth quarter of the year was 47.9%, compared to 50.7% in the corresponding quarter last year.

> Operating and other expenses in 2021 increased by NIS 382 million compared to 2020, an increase of 5.4%, mainly against the background of provisions for grants in accordance with the financial results.

Other operating expenses decreased by approximately 3.6%.

> Equity ratio - Tier 1 capital ratio as of December 31, 2021 was 11.50%, and the total capital ratio was 14.21%.

> Overseas operations - Leumi continues to grow its credit portfolio abroad, while significantly reducing compliance and regulatory risks: In the US - a deal was signed to merge LEUMI USA's operations with VALLEY NATIONAL BANK and upon completion, credit participation transactions are also expected; in Europe - it was decided to focus In credit to business and commercial customers and therefore, a process has begun to restore the bank license in the UK and move

on to activity as a credit company.

By 2030.

>

attributed to the Bank's shareholders as of December 31, 2021 amounted to NIS 41.6 billion, compared with NIS 37 billion.

>

as of December 31, 2021 amounted to NIS 343 billion, compared with NIS 295 billion on December 31, 2020, an increase of 16%.

Most of the increase in credit comes from mortgages, medium-sized businesses and large businesses.

>

as of December 31, 2021 amounted to NIS 537 billion, compared with NIS 447 billion on December 31, 2020, an increase of 20%.

Hanan Friedman, CEO of Leumi. NIS 6 billion net profit for the bank in 2021 (Photo: PR)

Green - and not just in the logo

Leumi Chairman of the Board, Dr. Summer Haj Yahya

: "Our record performance in the past year is due to the constant updating of the Leumi service model. The bank has engraved on its banner the creation of an innovative and dynamic system, which provides customers with the most convenient service And everywhere, while adapting to a changing environment of challenges and opportunities.

This year we have chosen to preface and publish Leumi's Environment, Company and Corporate Governance report together with the financial report. Green and in support of social enterprises that strengthen the values ​​of tolerance, fairness and equal opportunities in the entire population.

In order to continue Leumi's prosperity, we invest in our bankers and promote an organizational culture of excellence, creativity, fairness, innovation and responsibility.

I cherish from the bottom of my heart the professional and dedicated work of our managers and employees.

At the same time, I am grateful to our customers and investors for their continued trust in our path and our work. "

: "The implementation of our strategy, along with the digital tools and advanced models we have implemented in the bank, are reflected in the performance in the past year. We have achieved thanks to our human capital. We are in the midst of changing our corporate culture to one that emphasizes excellence. Accordingly, we take care to reward our dedicated employees, in line with business goals. I am confident that only then can we continue to provide our customers with the most convenient service The most advanced and leading in Israel. "

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