Bank Leumi (TASE: LUMI) reported its results for the third quarter of 2014 this morning. The bank's net profit grew by 22% to NIS 677 million, compared with NIS 555 million in the corresponding quarter of 2013.
In the third quarter of 2014, Bank Leumi made a provision of NIS 476 million for the consequences of investigations into its affairs overseas. The provision under this heading in the third quarter of 2013 was NIS 191 million. The bank states that in the first nine months of 2014 its results have been materially affected by investigations concerning its overseas customers, and also by material events at Israel Corporation.
Bank Leumi included NIS 331 million in its third quarter results for equity profits of Israel Corporation (TASE: ILCO) (reported results for the second quarter plus exceptional profits from the debt arrangement in Zim Integrated Shipping Services Ltd. and the sale of Peruvian electricity producer Edegel). The total effect of Israel Corporation's results on the profit of Bank Leumi in the first nine months of 2014 is NIS 261 million.
The bank's net profit in the third quarter excluding provisions against investigations was NIS 1.15 billion, compared with NIS 746 million in the corresponding quarter. Excluding the effect of the results of Israel Corporation, net profit in the third quarter was NIS 811 million.
Bank Leumi's annualized return on equity in the third quarter of 2014 was 10.2%, compared with 8.9% in the corresponding quarter. Excluding the effect of the provisions against investigations and Israel Corporation's results, the return on equity was 12.4% in the third quarter of 2014, compared with 12.1% in the corresponding quarter.
Net profit in the first nine months of 2014 totaled NIS 1.6 billion, similar to the figure for the corresponding quarter. Annualized return on equity was 7.9%. Excluding the effects of the provisions for investigations and the results of Israel Corporation, the annualized return on equity for the first nine months of 2014 was 11.3%.
Bank Leumi's capital adequacy ratio at the end of the third quarter was 14.24%. The core capital adequacy ratio was 9.44%.
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2014
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