Bank Leumi (TASE:LUMI) reported net profit of NIS 1.667 billion ($511 million) in the second quarter of 2021, more than double the NIS 694 million in the second quarter of 2020. Net profit in the first half of 2021 totaled NIS 3,007 million ($922 million), compared with NIS 462 million ($142 million) in the same period last year.
Return on equity (ROE) in the second quarter of 2021 was 17.9%, compared with 7.7% in the same quarter last year. Return on equity in the first half of 2021 was 16.1%. The significant increase in ROE stemmed from a material increase in income alongside a moderate increase in expenses; and from a reduction of the loan loss provision, compared with a significant increase in loan loss provision in the same period last year.
Loan loss expenses in the first half of 2020 amounted to NIS 370 million ($114 million), compared with NIS 1.7 billion ($522 million) in the same period last year. The rate of loan loss expenses in the first half of 2020 was 0.24%, compared with a 1.19% expense in the corresponding period last year. Most of the income arose from collections.
Leumi's board approved a NIS 630 million ($193 million) dividend distribution, which comprises 30% of the net profit for 2020.
Leumi president and CEO Hanan Friedman said, "I would like to thank all of Leumi's employees and managers for the impressive financial results we are reporting today. These results are in line with the strategy we have implemented in Leumi through structural changes, a change in our corporate culture and a change in our customer service model, alongside a transition to a performance-based bonus model that encourages excellence. We will continue to execute this strategy in order to continue leading Israel's banking sector."
Common Equity Tier 1 capital ratio as of June 30, 2021 was 11.98%, and total capital ratio reached 14.93%.
Published by Globes, Israel business news - en.globes.co.il - on August 12, 2021
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