The five largest banks (Leomi, Hapoalim, Discount, Mizrahi Tefahot and International) earned NIS 6.1 billion in the third quarter, a 30% jump compared to the same period last year. In the first nine months of 2022, the profit amounted to NIS 17.2 billion, a 20% increase compared to the corresponding period.
Bank Leumi, managed by Hanan Friedman and Chairman Samer Haj Yahya, was the last of the banks to publish its third quarter reports. The bank earned NIS 1.78 billion in the quarter, a 15% increase compared to the corresponding period. The profit represents a 14.9% return on capital. The nine months of the year Leumi finished with a profit of NIS 5.38 billion, an increase of 18% compared to the corresponding period. The bank distributed a dividend of NIS 356 million for the quarter, and since the beginning of the year it distributed NIS 1.6 billion.
The bank also presented a jump of 17.9% in the credit portfolio. Surprisingly, it also presents the best efficiency ratio (expenses divided by revenue) in the system, which stands at 39.1%. CEO Hanan Friedman: “The results testify to the successful implementation of the defined strategy. It is achieved with fewer resources, through careful risk management, alongside convenient, fair banking that is adapted to the needs of each customer in each of the service channels. It is based on advanced technological tools, data and models.”
The reason for the increase in profits this quarter is a jump in financing profits. On the other hand, there was almost no increase in credit losses, despite the signs of a slowdown in the economy. Thanks to the profit, the banks distributed a quarterly dividend of NIS 1.66 billion in addition to what was already distributed.
Bank Hapoalim managed by Dov Kotler and Bank Leumi recorded the highest profit this quarter (NIS 1.785 billion for Poaleim and NIS 1.782 for Leumi). As mentioned, the highest profit since the beginning of the year was recorded by Bank Leumi. The highest rate of return on capital (20.8%) was recorded by Mizrahi Tefahot. In terms of leading financial variables, it took Discount’s place as the third largest bank in the country.
Bank profits draw criticism in the political system. The Chairman of the Finance Committee, MK Moshe Gafni, wants to promote legislation according to which the interest on mortgages will not rise, even if the interest in the economy rises. The move draws sharp criticism from sources in the banking system.