Mizrahi Tefahot Bank (TASE:MZTF) reported its fourth quarter 2014 and full year 2014 results this morning. The bank posted a net profit of NIS 1.03 billion in 2014, compared with NIS 1.078 billion in 2013. The bank's return on equity was 10.4% in 2014, compared with 11.5% in 2013, after its capital base rose by NIS 1.1 billion, or 11.5%.
Net profit for the fourth quarter of 2014 was NIS 213 million, compared with NIS 252 million in the corresponding quarter of 2013, representing a 15.5% decline. This gives an annualized return on equity of 8.1%, compared with 10.8% in the corresponding quarter.
The bank's fourth quarter profit was affected by the directive from the Supervisor of Banks on the general provision for credit losses on credit to individuals, resulting in an extra provision of NIS 54 million.
In accordance with instructions from the Supervisor of Banks, Mizrahi-Tefahot Bank made a provision of NIS 95 million against possible consequences of an investigation by the US Department of Justice into tax evasion by US citizens with accounts in non-US banks.
Financing revenue from regular activity grew by NIS 180 million, or 5.8%, in 2014 compared with 2013, despite the decline in Bank of Israel interest rates and the negative inflation environment last year, which affected the bank's spreads.
The credit loss expense fell by NIS 115 million in 2014. In 2013, the bank made a special provision of NIS 191 million implementing a Supervisor of Banks directive on housing loans.
Mizrahi-Tefahot CEO Eldad Fresher said, "Mizrahi-Tefahot's success in continuing to grow and to raise its market share, given complex and challenging macro conditions and an increasing regulatory burden, is evidence of its strength and the quality of its workers and management." Fresher pointed out particularly the 6.5% growth in the bank's credit portfolio in 2014, including a 17.6% increase in credit to small businesses, and the maintenance of its lead in the mortgage market, with a market share of 34%, "while consistently reducing the risk characteristics of the portfolio."
Fresher's compensation cost was NIS 9 million in 2014. NIS 2.8 million of this was basic salary, and NIS 926,000 was bonuses. The compensation cost of Mizrahi-Tefahot chairman Moshe Vidman was NIS 4.9 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2015
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