Mizrahi Tefahot profit down

The bank has for the first time implemented a Bank of Israel order to raise provisions against housing loans, resulting in a NIS 191 million expense.

Mizrahi Tefahot Bank (TASE:MZTF) today published its financial report for the second quarter of 2013, before the market opened. The bank has for the first time implemented a Bank of Israel order to raise provisions against housing loans, resulting in a NIS 191 million expense for the quarter.

Net profit, after the expense for credit risk for housing loans, was NIS 245 million for the second quarter, 16.9% less than the net profit of NIS 295 million for the corresponding quarter of 2012. Return on equity was 11.1% for the second quarter.

Net profit fell 3.8% to NIS 525 million in the first half from NIS 546 million in the first half of 2012.

Financing revenue rose 8.5% to NIS 921 million for the second quarter from NIS 849 million for the corresponding quarter.

Mizrahi Tefahot Bank announced that since it is on the way to reaching its Tier-1 capital adequacy ratio target of 9%, it will resume the distribution of dividends. The board of directors decided to distribute a dividend of NIS 75 million. The bank also announced that, from December 31, 2014, it would distribute a dividend of up to 30% of the net profit from current operations, and 80% of the annual profit from non-routine activity.

Mizrahi Tefahot Bank is Israel's largest mortgage bank.

Mizrahi Tefahot Bank CEO Eli Yones said, "I am leaving my position as CEO of Mizrahi Tefahot Bank, after nine and a half years, with a sense of deep satisfaction. The impressive achievements we have reached in recent years are an excellent springboard that will allow the bank to deal in the best possible way with the coming challenges.

"As in previous financial reports, the current financial report shows a picture of continued expansion and growth, with even greater force… without the extraordinary expense, the bank would have reported a record profit of more than NIS 300 million for the second quarter and a return on equity of 16%."

Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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