The tide in the mortgage markets and the return of the economy to routine brought the Bank einternational Record record profits in 2021. The bank’s reports published today (Monday) show that the net profit of the International Group amounted to NIS 1.4 billion in 2021, a jump of 87% compared to NIS 750 million in 2020.
In the fourth quarter, net profit amounted to NIS 333 million, compared with NIS 210 million in the corresponding quarter in 2020, an increase of 58.6%. The return on capital reached 14.7% last year compared to a return on capital of 8.6% in 2020 and in the fourth quarter it stood at 14%.
Following the results, the Bank’s Board of Directors approved the distribution of a dividend of NIS 165 million, which constitutes 50% of the net profit for the fourth quarter of 2021. This is in addition to a dividend of NIS 215 million distributed in January this year and NIS 545 million distributed in 2021.
The international credit portfolio of the international crossed the amount of NIS 100 billion for the first time. It grew in the last year by 10.8% and amounted to NIS 102.2 billion. The housing loan portfolio (mortgages) grew by 13.8% and amounted to NIS 32.26 billion.
Credit to the small business sector grew by 11.5% to NIS 21 billion, credit to medium-sized businesses increased by 13.3% to NIS 6 billion and credit to large businesses grew by 11% to NIS 18.6 billion.
Credit to households (excluding mortgages) grew by 6%. In the fourth quarter, credit to the public increased by 5.4%. International noted that “credit growth is characterized by credit diversification and adherence to proportionate risk management policies.”
The client assets portfolio grew by 13.5%
The growth is also evident in the areas of the capital market and investment advice: the client assets portfolio (deposits and securities) has grown at a rate of 13.5% in the past year and amounted to NIS 601 billion.
The Bank’s reports also reveal that the Bank’s revenues increased by 20.4% in 2021 compared with the corresponding period last year and amounted to NIS 4.55 billion. Net financial income increased by 11.2%, compared with the corresponding period last year and amounted to NIS 3.1 billion. Revenues from commissions increased by 5.3% and amounted to NIS 1.44 billion, revenues from commissions from capital market activity grew by 7.3%.
The recovery of the economy allowed the bank to also record income from credit losses (in light of the public’s ability to meet the loans it took), and these amounted to NIS 216 million in 2021, compared to expenses of NIS 464 million in 2020. In 2021, income from credit losses was recorded. This was mainly due to a decrease in the group provision, which is explained by an improvement in macroeconomic indices and indicators indicating the level of risk inherent in the Bank’s credit portfolio and the continued decline in debt deferred payments, which constitute 0.08% of total credit to the public. “Changes in the macroeconomic environment as a result of the spread of the corona virus and the uncertainty regarding the impact on the state of the economy and borrowers,” explained International.
Slight decrease in efficiency ratio
The efficiency ratio was 58.3% in 2021, compared with 61.8% in 2020. This is despite the fact that operating and other expenses increased by 20% in 2021 compared to the corresponding period last year, an increase explained by an increase in salary expenses.
Also this year, disposal expenses were included in respect of an early retirement plan implemented mainly in the fourth quarter of the year. The streamlining processes implemented by the Bank and the voluntary retirement plan implemented at the end of the year resulted in a decrease of 4.6% in the average number of jobs at the Bank.
The capital attributed to the Bank’s shareholders grew by 9.4% in 2021 (an increase of NIS 862 million) and amounted to NIS 10 billion on December 31, 2021.
Smadar Barber-Tzadik, CEO of the International Group, said: “The results presented by International in 2021 reflect the Bank’s growth in all strategic focus areas, a growth that is reflected in an accelerated increase in both credit and customer assets. It is important to emphasize the high level of profitability of the international over time, while maintaining low volatility and maintaining high resilience.
“As the first bank to launch a comparative system based on the open banking system – the Multibank system, International will continue to compete and grow both in the Bank’s leadership field – investments, and in a variety of banking areas.