Mizrahi Tefahot reports higher profit

Eldad Fresher Photo: Tamar Matsafi

Revenue from financing rose, but so did salary expenses and provisions for credit losses.

Mizrahi Tefahot Bank (TASE:MZTF) opened the reporting season for banks today with good results for the first quarter of the year. Mizrahi Tefahot Bank, managed by CEO Eldad Fresher, reported a NIS 343 million profit in the first quarter of 2018, 7% more than in the first quarter of 2017. The bank's return on shareholders' equity in the first quarter was 10.3%.

Mizrahi Tefahot's profit rose despite a 16% rise to NIS 569 million in salary expenses in the first quarter, and even though provisions for credit losses rose from NIS 49 million in the first quarter of 2017 to NIS 82 million in the first quarter of 2018. On the other hand, NIS 90 million in revenue from trading activity and revaluing of derivatives contributed NIS 90 million to the bank's first quarter profit. Also boosting Mizrahi Tefahot Bank's bottom line was a 5% jump to NIS 1.08 billion in financing revenue. Another factor was an increase to NIS 30 million in the profit of Mizrahi Tefahot Bank's Bank Yahav for Government Employees Ltd. subsidiary, almost double its profit in the first quarter of 2017.

Mizrahi Tefahot Bank's credit portfolio grew again, reaching NIS 183.6 billion, and is now 6.1% more than at the end of the first quarter of 2017 and 1.3% more than at the end of 2017. The bank, which is currently active mainly in mortgages, is devoting resources to diversification of its credit portfolio and increasing its business credit activity. Mizrahi Tefahot Bank's credit for small businesses rose 10.0% and its credit for medium-sized businesses surged 20.4%, resulting in more than 10% growth in in financing revenue from these activities.

For the first time in its history, Mizrahi Tefahot will distribute 40% of its profit, amounting to NIS 137 million, as a dividend in the first quarter.

Mizrahi Tefahot Bank is currently pushing for its acquisition of Union Bank of Israel (TASE: UNON). Mizrahi Tefahot Bank's representatives, including Fresher, are scheduled today to hold a critical meeting at the Antitrust Authority in order to persuade the authority to uphold the merger.

Published by Globes [online], Israel business news - www.globes-online.com - on May 8, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Eldad Fresher Photo: Tamar Matsafi
Eldad Fresher Photo: Tamar Matsafi
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