The Bank maintains a rate of profitability in the first three quarters of the year and shows a return on equity of 15.3%
The International Bank presents record profits: The net profit of the International Group amounted to NIS 1,072 million in the first nine months of the year, an increase of 98.5% compared to the corresponding period last year. The return on capital reached 15.3%.
In the third quarter of the year, net income amounted to NIS 364 million, compared with NIS 201 million in the corresponding quarter last year. The return on equity in the third quarter reached 15.5%.
Growth and efficiency
The Bank’s total revenues increased by 8.5% in the first nine months of the year, compared with the corresponding period last year. Total financing income increased in the first nine months of the year by about 10.9%, compared with the corresponding period last year. Commission income increased by 3%, compared with the corresponding period last year, including commission income from capital market activity, which grew by 6.3%.
Credit to the public increased by 6.8% in the past year and amounted to NIS 96,965 million. The growth in credit is characterized by the continued spread of credit and while maintaining a proportionate risk management policy. 5.4% and credit to households by 4.2%. Since the beginning of the year, credit to the public has increased by 5.1%.
Significant growth also in the areas of the capital market and investment advice: The client assets portfolio (deposits and securities) grew in the last year at a rate of 22.6% and amounted to NIS 588.3 billion. In the first nine months of the year, the client assets portfolio grew by 11%.
Public deposits increased by 9.1% in the past year and amounted to NIS 148,273 million.
International continues to become more efficient and the efficiency ratio is 57.9% in the first nine months of the year and 57.3% in the third quarter, compared with 61.8% in 2020. Operating and other expenses in the first nine months of the year increased by NIS 59 million compared to the same period last year. The increase is explained by an increase in salary expenses, mainly due to the adjustment of the remuneration components that change to the Bank’s profitability.
The upward trend in capital attributed to the Bank’s shareholders continues, which grew by 9.6% in the first nine months of the year (an increase of NIS 881 million) and amounted to NIS 10,022 million on September 30. The Tier 1 equity ratio rose to 11.64% compared to the required regulatory ratio of 8.25%, a gap of about 3.4% (2.4% excluding regulatory capital easing) the highest gap in the system.
The Bank’s Board of Directors approved a dividend of NIS 320 million, which constitutes 30% of the net profit for the first nine months of the year. This is in addition to a dividend of NIS 225 million distributed in September 2021 for the Bank’s profits in 2020. Will distribute up to 50% of the net profit, there is no change and it remains the same and its implementation will continue to be examined in accordance with developments and regulations and subject to the directives of the Supervisor of Banks.
Credit portfolio quality
The rate of debt deferred from total credit to the public at the end of September 2021 was zero at 0.09%, compared to 0.2% at the end of the second quarter and 1.9% at the end of December 2020, indicating the quality of the Bank’s credit portfolio and borrowers. The bank continues to maintain adequate provision pillows.
Revenues from credit losses in the first nine months of the year amounted to NIS 206 million, compared with expenses of NIS 413 million in the corresponding period last year. During 2020, in view of the high uncertainty created by the corona crisis, the Bank increased its provision for credit losses in the amount of NIS 436 million.
In the first nine months of the year, income was recorded for credit losses and they were 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.
Smadar Barber-Tzadik, CEO of the International Group, said: “International continues its growth trend while maintaining high financial strength. The growth is evident both in credit – mainly in the Bank’s focus areas, in the customer assets portfolio – growth that reflects the Bank’s leadership in the capital market, and in the volume of capital that first crossed the NIS 10 billion mark. Improving work processes and automation as well as developing digital channels and promoting innovation.
International, as a competition-generating bank, welcomes pro-competitive moves, and was at the forefront of the recently launched Open Banking Reform, when it was the first bank to launch Multibank – a service for centralizing financial information that uses open banking. The bank also promotes the “click-through” service for the transfer of account activity between banks, and the transfer of customers as part of the service supports the bank’s continued growth. “