First International Bank of Israel (TASE: FTIN) reported a 20.2% jump in profit in 2012 to NIS 577 million in its financial results for the fourth quarter and full-year 2012.
The bank also reported that return on equity rose to 9.5% in 2012 from 8.5% in 2011 and the core capital ratio stood at 9.65% at the end of 2012, the highest of Israel's major banks.
However, profit in the fourth quarter 2012 amounted to NIS 132 million, down 25.8% from the corresponding quarter. The bank said that this was mainly due to lower tax expenses in the fourth quarter of 2011 resulting from legislation for amending the tax burden.
First International Bank CEO Smadar Barber-Tsadik said “Despite the downturn notable in the local and worldwide economies in 2012, the First International Bank Group continues to present one of the highest rates of financial resilience in the system, as apparent from the highest Tier 1 capital ratio among the five largest banks, high liquidity ratios, and from its quality and diversified asset portfolio. The Group is also maintaining a growth pattern as apparent from the favorable increase in financing income and credit and deposit volumes. Concurrently, budgetary restraint is being maintained, leading to a decrease in operating expenses."
Net interest income and non-interest financing income totaled NIS 2.4 billion up 15.2% from 2011. In the fourth quarter, this income rose by 0.8% to NIS 593 million compared with the corresponding quarter.The income growth was achieved despite the 0.85% fall in the interest rate compared with 2011.
Commission income totaled NIS 1.36 billion, down NIS 85 million, mainly from reduced commissions from securities activity resulting from the fall in turnover in the stock market. The downturn in these income items ceased during the year and in the fourth quarter the items totaled NIS 347 million, similar to the NIS 346 million recorded in the corresponding quarter and up 3.5% from the preceding quarter.
Expenses on credit losses were compiled on a conservative basis and in 2012 included allowances connected with the closure of the London branch, totaled NIS 134 million for the year. Expenses on credit losses as a ratio of total credit to the public amounted to 0.2% compared with 0.14% in 2011.
Operating and other expenses fell 0.9% to NIS 2.791 billion while salary and related expenses totaled NIS 1.633 billion compared with NIS 1,630 million in 2011. In the fourth quarter, operating and other expenses fell 2.2% compared with the corresponding quarter to NIS 713 million.
Credit to the public rose by 4.5% to NIS 67.879 billion in 2012 and the average balance of credit to the public rose 5.3% to NIS 66.412 billion. Deposits from the public rose 3.7% to NIS 84.365 billion.
Capital attributed to shareholders totaled NIS 6.563 billion on December 31 2012, up 13% from NIS 5.81 billion at the end of 2011. Tier 1 capital ratio was 9.65% at the end of 2012 compared with 8.46% at the end of 2011. The overall capital ratio reached 14.94%.
Published by Globes [online], Israel business news - www.globes-online.com - on March 20, 2013
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