Manufacturers demand Bank of Israel to intervene in trading and weaken the shekel • US stock markets continue to rise • Trading in Tel Aviv closes with slight price declines • Bank reports: Credit losses are already being seen
The Tel Aviv Stock Exchange. Slight declines // Photo: Yehoshua Yosef
Photo:
Photo: Yehoshua Yosef
The dollar and the euro weaken against the shekel: During the trading day yesterday, the dollar fell to a nine-year low, when it fell below the NIS 3.4 rate; The euro fell below NIS 4; The British pound is trading at less than 4.5 shekels. The dollar has weakened not only against the shekel, but also against other major currencies in the world, due to the US Federal Reserve's money printing policy which now focuses on preventing corporate bankruptcies and aiding markets.
In addition, the Bank of Israel prefers not to intervene in the foreign exchange market at this stage, so that the bank's foreign exchange reserves have skyrocketed to a peak of NIS 160 billion. The Manufacturers' Association calls on the government to act artificially to weaken the shekel to make it easier for exporters. Living for all citizens.
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The Tel Aviv Stock Exchange recorded slight declines in all indices, while on Wall Street the leading indices continue to burst forward and cover the corona losses: NASDAQ and S&P broke new records this week, with NASDAQ already jumping 30% from its price at the beginning of the year - not yet an era The corona and s & p are about 8% away from their previous peak. Prior to trading yesterday the Dow Jones was only 0.7% away from its price in early January.
Credit losses to banks
Meanwhile, the corona continues to charge Israeli banks a price, but some of them: While Discount suffered a blow with a drop of nearly 70% in net profit compared to the same quarter last year, Leumi suffered a 25% "only" decline. According to the report published by Discount, the bank recorded a net profit of NIS 174 million in April-June with a return on capital of 3.8%. The first half of the year ended with a profit of NIS 453 million - a decrease of more than 50% compared to January- June 2019. The dramatic decrease in profit is due to the Bank's high expenses for credit losses, as a result of the corona, in the amount of NIS 532 million. Discount is accelerating the Bank's efficiency program, under which 300 older employees (ages 66-50) will retire by preferential terms The total retirement plan before the tax effect is estimated at NIS 550 million.
The profits in Leumi
Leumi recorded a profit of NIS 694 million in the last quarter - a decrease of 25% compared to the same period last year. The return on equity was 7.7%, compared with 10.6% in April-June 2019. Leumi also had to record high expenses on credit losses due to the corona, in the amount of NIS 875 million - a figure that is 66% higher than the corresponding quarter last year, before the corona era. The bank froze mortgage payments until the end of June, but in the two months since, close to two-thirds of the bank's customers have returned to pay off the mortgages.
Leumi's commercial portfolio has grown by 7.4% in the past year, its total business portfolio has increased by 6.4% and its mortgage portfolio has grown by 5%.