PR Newswire | May 27, 2021 01:59AM EDT

2021

05/27 00:58 CDT

Leumi Reports Net Income of NIS 1,340 Million ($402 Million) and 15% ROE in Q1 2021Significant increase in income alongside a moderate increase in expenses - the efficiency ratio in the first quarter was 49.4% compared to 74.7% in the corresponding period last year;Credit portfolio grew by 4.1% in the first quarter;Loan loss expense reflects a 0.28% income, compared to an expense rate of 1.2% in the same period last year TEL AVIV, Israel, May 27, 2021

TEL AVIV, Israel, May 27, 2021 /PRNewswire/ --

> Net income in the first quarter of 2021 totaled NIS 1,340 million ($402 million), compared to a loss of NIS 232 million ($70 million) in the same period last year.

> Return on equity in the first quarter of 2021 was 15%, compared with a negative 2.6% ROE in the same period last year. The significant increase in ROE stems from a material increase in income alongside a moderate increase in expenses, and from a reduction of the loan loss provision in the quarter, compared to a significant increase in the loan loss provision in the same period last year.

> Growth in the loan portfolio- the Bank continues to focus its growth efforts on the loan portfolio in the middle-market, corporate, and mortgage loan segments. During the first quarter of 2021, the total loan portfolio grew by 4.1%; The corporate loan portfolio (including real estate) grew by 9.6%; the middle-market portfolio grew by 4.8% and the mortgage portfolio grew by 2.2%.

> Loan loss expenses (income) - in the first quarter of 2021, loan loss income reached NIS 212 million ($64 million), compared to an expense of NIS 860 million ($258 million) in the same period last year. The rate of loan loss income in the first quarter was 0.28%, compared to a 1.2% expense in the corresponding period last year. Most of the income in the quarter arises from collections. The movement in the collective provision during the reporting period led to a loan loss income of 0.06% on the back of improvement in the economic indicators underlying the provision, mostly due to the swift vaccination process and reopening of the Israeli economy.

> Net interest income in the first quarter of 2021 totaled NIS 2,348 million ($704 million), compared to NIS 2,169 million ($651 million) in the same period last year - a 8.3% increase. The increase in interest income is despite the material decrease in the interest rates of the Fed and the Bank of Israel, on the back of the increase in the Bank's credit portfolio and Consumer Price Index (CPI) differences between the two periods.

> Non-interest finance incomein the first quarter of 2021 reached NIS 441 million ($132 million), compared to an expense of NIS 660 million ($198 million) in the same period last year. Most of the increase stems from losses recorded in the item in the same period last year, on the back of decreases in capital markets due to the outbreak of the coronavirus, and due to the effect of derivatives and exchange rate differentials.

> Operating and other expenses in the first quarter of 2021 were up by NIS 36 million ($11 million) compared with the same period last year, a 2% increase. Most of the increase stems from an increase in salaries and related expenses due to provisions for bonuses, which are based on the financial results. The increase was offset by a decrease in other operating expenses, including maintenance and depreciation expenses.

> The efficiency ratio in the first quarter of 2021 was 49.4%, compared to 74.7% in the corresponding period last year. The substantial improvement in the efficiency ratio arises from a significant increase in income alongside a moderate increase in expenses.

> Higher CET1 capital ratio than the regulatory requirement - Common Equity Tier 1 capital ratio as at March 31, 2021 was 11.73%, and total capital ratio was 14.73%.

> Significantly higher CET1 capital ratio than the regulatory requirement- Common Equity Tier 1 capital ratio as at December 31, 2020 was 11.9%, and total capital ratio was 15.6%.

Development of Balance Sheet Items:

> Shareholders' equity as at March 31, 2021 totaled NIS 39.1 billion ($11.7 billion), compared with NIS 36.2 billion ($10.9 billion) as at March 31, 2020.

> Net Loans to the publicas at March 31, 2021 totaled NIS 307.6 billion ($92.3 billion), compared with NIS 294.5 billion ($88.3 billion) as at March 31, 2020, a 4.4% increase. Most of the increase is due to mortgage, middle-market and corporate loans.

> Deposits by the public as at March 31, 2021 totaled NIS 460.4 billion ($138.1 billion), compared with NIS 418.6 billion ($125.6 billion) as at March 31, 2020, a 10.0% increase.

Leumi(TASE: LUMI)President & CEO, Mr. Hanan Friedman:

"The financial statements reflect, for the first time, the changes we are leading in Leumi's corporate culture and the transition to a performance-based compensation model, which aims to encourage excellence. We see the fruits of the process in the results of the various divisions, and I am convinced that this change in the corporate culture will continue to bear fruit. The results of the financial statements reflect the beginning of our implementation of the Bank's growth strategy across the business lines in which we chose to carry out accelerated growth, in addition to promoting business, service, technological and operational excellence."

Leumi Group - Principal Data from the Financial Statements

Profit and Profitability (in NIS millions)

For the three months ended Change March 31

2021 2020 NIS % millions

Net Interest income 2,348 2,169 179 8.3

Loan loss expenses (income) (212) 860 (1,072) -

Non-interest income 1,374 246 1,128 +

Operating and other expenses 1,839 1,803 36 2.0

Profit (loss) before tax 2,095 (248) 2,343 +

Provision (benefit) for tax 753 (39) 792 +

Profit (loss) after tax 1,342 (209) 1,551 +

Bank's share in associates' profits 7 (14) 21 + (losses)

Net income attributable to non-controlling (9) (9) - interests

Net income (loss) attributable to the banking 1,340 (232) 1,572 + corporation's shareholders

Return on equity (%) 15.0 (2.6)

Earnings (loss) per share (NIS) 0.92 (0.16)



Development of Balance Sheet Items (in NIS millions)

As at March 31 December 31 2020 2021 2020

Net Loans to the public307,561294,486295,341

Deposits by the public 460,412418,627447,031

Shareholders' equity 39,118 36,245 37,664

Total assets 565,934531,535556,035

Principal Financial Ratios (%)

As at March 31 December 31 2020 2021 2020

Net loans to the public to total assets54.35 55.40 53.12

Deposits by the public to total assets 81.35 78.76 80.40

Total equity to risk assets 14.73 15.03 15.58

Total Tier 1 equity to risk assets 11.73 10.84 11.87

Leverage ratio 6.60 6.43 6.57

Liquidity coverage ratio 130 128 137

The data in this press release has been converted into US dollars solely for convenience purposes, at the representative exchange rate published by the Bank of Israel on March 31, 2021, NIS 3.334.

Conference Call Details:

A conference call to discuss the results will be held today at 5 PM (Israel); 3 PM (UK); 10:00 AM (ET).

It is recommended to connect to the link at least 10 minutes prior to the beginning of the call. An archived recording will be available on the Leumi website one business day after the call ends.

Conference Call Dial-in Details (no passcode required):

Israel 03-918-0609UK 0-800-917-5108US & Canada 1-888-642-5032All other locations +972-3-918-0609

The conference call does not replace the need to review the latest periodic/quarterly reports containing full information, including forward-looking information, as defined in the Israeli Securities Law, and set out in the aforementioned reports.

For more information visit www.leumi.co.il or contact Adi Molcho Weinstein, VP, Head of Investor Relations, at investorrelations@bankleumi.co.il

View original content: http://www.prnewswire.com/news-releases/leumi-reports-net-income-of-nis-1-340-million-402-million-and-15-roe-in-q1-2021--301300541.html

SOURCE Bank Leumi