PR Newswire | Nov 23, 2021 06:14AM EST

2021 Results

11/23 05:13 CST

First International Bank of Israel Presents Third Quarter and First Nine Months 2021 Results TEL AVIV, Israel, Nov. 23, 2021

TEL AVIV, Israel, Nov. 23, 2021 /PRNewswire/ -- First International Bank of Israel (TASE: FIBI) one of Israel's major banking groups, today announced its results for the third quarter and first nine months of 2021.

Financial Highlights

* Net profit of NIS 364 million in the third quarter of the year; Return on equity 15.5%;

* Net profit of NIS 1,072 million in the first nine months of the year, representing growth of 99%; Return on equity 15.3%;

* Growth of 8.5% in total income for the first nine months of the year in comparison with the corresponding period last year;

* Growth of 6.8% in credit to the public in the past year: Residential loans increased by 13.4%, small businesses increased by 8.9%, middle-market businesses increased by 5.4% and credit to households increased by 4.2%;

* The Bank continued to expand its activities in the capital markets and investment consulting: growth of 22.6% in the past year in the customer assets portfolio (deposits and securities);

* Ratio of tier I equity capital to risk components of 11.64%;

* The Board of Directors of the Bank decided on a dividend distribution of NIS 320 million, comprising 30% of the net profit of the first nine months of the year;

Profitability

Record profit for the First International Bank: the net profitin the first nine month of the year amounted to NIS 1,072 million, an increase of 98.5% in comparison with the corresponding period of last year. Return on equity reached 15.3%.

In the third quarter of the year, net profit amounted to NIS 364 million, as compared to NIS 201 million in the corresponding quarter of last year. Return on equity for the third quarter reached 15.5%.

Growth and Efficiency

Total income of the Bankin the first nine months of the year increased by 8.5% compared to the corresponding period of last year. Total financing income in the first nine months of the year increased by 10.9% compared to the corresponding period of last year. Commission income in the first nine months of the year increased by 3% compared to the corresponding period of last year, including commission income from capital market operations, which increased by 6.3%.

Credit to the public in the past year increased by 6.8%, and amounted to NIS 96,965 million. The growth in credit was characterized by the continued diversity of the credit, while maintaining a balanced risk-management policy. The residential loan portfolio grew by 13.4%, small businesses grew by 8.9%, the middle market businesses grew by 5.4% and credit to householdsgrew by 4.2%.Since the beginning of the year, credit to the public grew by 5.1%.

Growth was also evident in the capital markets field and investment consulting field:the customer assets portfolio (deposits and securities), grew by 22.6% in the past year and amounted to NIS 588.3 billion. In the first nine months of the current year, the customer assets portfolio grew by 11%. Deposits from the public increased by 9.1% in the past year and amounted to NIS 148,273 million.

The First International Bank continued to improve efficiencies and the efficiency ratio improved to 57.9% in the first nine months of the year and 57.3% in the third quarter, as compared to 61.8% in 2020. Operating and other expenses in the first nine months of the year increased by NIS 59 million, representing a growth of 3.1% as compared to the corresponding period of last year. This growth was due to increased payroll expenses, mainly based on an adjustment of the variable compensation component which is related to the profitability of the Bank. The Bank introduced an early retirement plan and most of the retirees are expected to retire at the end of the year.

Financial Stability

The upward trend in thecapital attributable to the shareholders of the Bank continued, and grew by 9.6% in the first nine months of the year (representing growth of NIS 881 million) and as of September 30, 2021, amounted to NIS 10,022 million. The tier I equity capital ratioincreased to 11.64%, compared with the required regulatory ratio of 8.25%, a positive difference of 3.4% (or 2.4% when disregarding the regulatory capital relief), which represents the highest positive difference in the Israeli banking system.

The Board of Directors of the Bank approved a dividend distribution of NIS 320 million, comprising 30% of net profit for the first nine months of the year. This is in addition to the dividend of NIS 225 million, which was distributed in September 2021 in respect of the profit of the Bank for 2020.

The Bank's policy for the distribution of 50% of net profit remains unchanged, and its implementation continues to be examined in accordance with developments and regulation, and subject to guidelines of the Supervisor of Banks in Israel.

Quality of the Credit Portfolio

The ratio of deferred debts to total credit to the public at the end of September 2021 amounted to a negligible ratio of 0.09%, compared to 0.2% at the end of the second quarter, and 1.9% at the end of December 2020. This is an indication of the quality of the credit portfolio and the quality of the Bank's borrowers. The Bank continues to maintain appropriate provision cushions.

Income in respect of credit losses amounted to NIS 206 million in the first nine months of the year, compared to expenses of NIS 413 million in the corresponding period of last year. During 2020, given the high uncertainty caused by the Corona crisis, the Bank increased the credit loss provision by NIS 436 million.

In the first nine months of 2021, the Bank recorded income in respect of credit losses, primarily because of the decline in the collective provision. This was due to an improvement in macro-economic indicators, indicators showing the level of risk inherent in the credit portfolio of the Bank, and the continued decline in the volume of deferred repayment of debts.

Management Comment

Ms. Smadar Barber-Tsadik, CEO of the First International Bank Groupstated, "The First International Bank continued its growth trend, while maintaining its high financial stability. The growth in credit is clear - mostly in the Bank's focus areas: within the customer assets portfolio whose growth reflects our leadership in the capital markets, as well as in the volume of capital which for the first time crossed the NIS 10 billion milestone. We continued our consistent trend of improving our efficiency ratio, by advancing work and automation processes, developing digital channels and promoting innovation, as well as via other activities.

"The First International Bank, as a competition-generating bank, welcomes steps that encourages increased competition within our market, and stands at the forefront of the open banking reform, recently introduced by the Bank of Israel. We are the first bank to introduce Multibank - a service for the collection of financial data used by open banking. The Bank also promotes the service of transfer-at-a-click for the movement of bank accounts between different banks, and the transfer of customers within the framework of the service, which will support the continued growth of our Bank."

CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES



For the nine For the yearPrincipal financial ratios months ended ended SeptemberDecember 31, 30,

2021 2020 2020

in %

Execution indices

Return on equity attributed to shareholders of15.3% 8.4% 8.6% the Bank(1)

Return on average assets(1) 0.84% 0.48% 0.49%

Ratio of equity capital tier 1 11.64% 10.93%11.18%

Leverage ratio 5.54% 5.39% 5.29%

Liquidity coverage ratio 133% 145% 150%

Ratio of total income to average assets(1) 2.6% 2.8% 2.7%

Ratio of interest income, net to average 1.6% 1.8% 1.7% assets (1)

Ratio of fees to average assets (1) 0.8% 0.9% 0.9%

Efficiency ratio 57.9% 61.0% 61.8%



Credit quality indices

Ratio of provision for credit losses to credit1.12% 1.35% 1.38% to the public

Ratio of impaired debts or in arrears of 90 0.84% 1.10% 0.86% days or more to credit to the public

Ratio of provision for credit losses to total 181% 168% 221% impaired credit to the public

Ratio of net write-offs to average total (0.02%)0.15% 0.10% credit to the public (1)

Ratio of expenses (income) for credit losses (0.30%)0.62% 0.52% to average total credit to the public (1)



Principal data from the statement of income For the nine months ended September 30,

2021 2020

NIS million

Net profit attributed to shareholders of the Bank 1,072 540 Interest Income, net 2,090 1,980 Expenses (income) from credit losses (206) 413 Total non-Interest income 1,281 1,126 Of which: Fees 1,057 1,026 Total operating and other expenses 1,953 1,894 Of which: Salaries and related expenses 1,199 1,138 Dismissal expenses 8 5 Primary net profit per share of NIS 0.05 par value 10.68 5.38 (NIS)



Principal data from the balance sheet 30.9.2130.9.2031.12.20

NIS million

Total assets 173,758159,370167,778

of which: Cash and deposits with banks 57,083 52,366 57,802

Securities 14,803 12,174 13,105

Credit to the public, net 95,877 89,585 90,970

Total liabilities 163,301150,042158,243

of which: Deposits from the public 148,273135,914141,677

Deposits from banks 5,471 1,717 2,992

Bonds and subordinated 2,851 4,384 4,394 capital notes

Capital attributed to the shareholders of the 10,022 8,944 9,141 Bank



Additional data 30.9.2130.9.2131.12.20

Share price (0.01 NIS) 11,820 7,108 8,514

Dividend per share (0.01 NIS) 225 125 125

(1) Annualized.

CONSOLIDATED STATEMENT OF INCOME

(NIS million)

For the three months For the nine months For the year ended September 30 ended September 30 Ended December 31

2021 2020 2021 2020 2020

(unaudited) (unaudited) (unaudited) (unaudited) (audited)

Interest Income 807 731 2,392 2,160 2,878

Interest Expenses 97 69 302 180 241

Interest Income, net 710 662 2,090 1,980 2,637

Expenses (income) from credit losses (69) 91 (206) 413 464

Net Interest Income after expenses from credit losses 779 571 2,296 1,567 2,173

Non- Interest Income

Non-Interest Financing income 63 36 214 97 148

Fees 346 336 1,057 1,026 1,371

Other income 6 - 10 3 4

Total non- Interest income 415 372 1,281 1,126 1,523

Operating and other expenses

Salaries and related expenses 399 386 1,199 1,138 1,532

Maintenance and depreciation of premises and equipment 84 89 255 261 344

Amortizations and impairment of intangible assets 27 24 78 71 96

Other expenses 135 141 421 424 597

Total operating and other expenses 645 640 1,953 1,894 2,569

Profit before taxes 549 303 1,624 799 1,127

Provision for taxes on profit 193 109 570 254 368

Profit after taxes 356 194 1,054 545 759

The bank's share in profit of equity-basis investee, after taxes 21 19 57 24 29

Net profit:

Before attribution to non-controlling interests 377 213 1,111 569 788

Attributed to non-controlling interests (13) (12) (39) (29) (38)

Attributed to shareholders of the Bank 364 201 1,072 540 750

NIS

Primary profit per share attributed to the shareholdersof the Bank

Net profit per share of NIS 0.05 par value 3.62 2.00 10.68 5.38 7.48

STATEMENT OF COMPREHENSIVE INCOME

(NIS million)

For the three months For the nine months For the year ended September 30 ended September 30 Ended December 31

2021 2020 2021 2020 2020

(unaudited) (unaudited) (unaudited) (unaudited) (audited)

Net profit before attribution to non-controlling interests 377 213 1,111 569 788

Net profit attributed to non-controlling interests (13) (12) (39) (29) (38)

Net profit attributed to the shareholders of the Bank 364 201 1,072 540 750

Other comprehensive income (loss) before taxes:

Adjustments of available for sale bonds to fair value, net (8) 60 (4) (30) (4)

Adjustments of liabilities in respect of employee benefits 12 (16) 58 (31) (74)(1)

Other comprehensive income (loss) before taxes 4 44 54 (61) (78)

Related tax effect - (14) (18) 21 26

Other comprehensive income (loss) before attribution to 4 30 36 (40) (52)non-controlling interests, after taxes

Less other comprehensive income (loss) attributed to 1 (1) 2 (1) -non-controlling interests

Other comprehensive income (loss) attributed to the 3 31 34 (39) (52)shareholders of the Bank, after taxes

Comprehensive income before attribution to non-controlling 381 243 1,147 529 736interests

Comprehensive income attributed to non-controlling (14) (11) (41) (28) (38)interests

Comprehensive income attributed to the shareholders of the 367 232 1,106 501 698Bank

(1)Mostly reflects adjustments in respect of actuarial assessments as of the end of the period regarding defined benefits pension plans, of amounts recorded in the past in other comprehensive income.

The notes to the financial statements are an integral part thereof.

CONSOLIDATED BALANCE SHEET

(NIS million)

September 30, December 31,

2021 2020 2020

(unaudited) (unaudited) (audited)

Assets

Cash and deposits with banks 57,083 52,366 57,802

Securities 14,803 12,174 13,105

Securities which were borrowed 232 14 11

Credit to the public 96,965 90,810 92,247

Provision for Credit losses (1,088) (1,225) (1,277)

Credit to the public, net 95,877 89,585 90,970

Credit to the government 859 651 656

Investment in investee company 699 629 636

Premises and equipment 929 970 965

Intangible assets 275 249 272

Assets in respect of derivative 1,565 1,438 1,897instruments

Other assets(2) 1,436 1,294 1,464

Total assets 173,758 159,370 167,778

Liabilities and Shareholders' Equity

Deposits from the public 148,273 135,914 141,677

Deposits from banks 5,471 1,717 2,992

Deposits from the Government 417 426 459

Bonds and subordinated capital notes 2,851 4,384 4,394

Liabilities in respect of derivative 1,751 1,669 2,314instruments

Other liabilities(1)(3) 4,538 5,932 6,407

Total liabilities 163,301 150,042 158,243

Capital attributed to the shareholders 10,022 8,944 9,141of the Bank

Non-controlling interests 435 384 394

Total equity 10,457 9,328 9,535

Total liabilities and shareholders' 173,758 159,370 167,778equity

(1) Of which: provision for credit losses in respect of off-balance sheet credit instruments in the amount of NIS 86 million and NIS 77 million and NIS 86 million at 30.9.21, 30.9.20 and 31.12.20, respectively.

(2) Of which: other assets measured at fair value in the amount of NIS 263 million and NIS 90 million and NIS 247 million at 30.9.21, 30.9.20 and 31.12.20, respectively.

(3) Of which: other liabilities measured at fair value in the amount of NIS 440 million and NIS 100 million and NIS 258 million at 30.9.21, 30.9.20 and 31.12.20, respectively.

The notes to the financial statements are an integral part thereof.

STATEMENT OF CHANGES IN EQUITY

(NIS million)

For the three months ended September 30, 2021 (unaudited)

Share Accumulated Total capital other Retained share-holders' Non- controlling Total and comprehensive earnings (2) equity interests equity premium (1) income (loss)

Balance as of June 30, 2021 927 (152) *9,105 9,880 421 10,301

Net profit for the period - - 364 364 13 377

Dividend - - (225) (225) - (225)

Other comprehensive income, after tax effect - 3 - 3 1 4

Balance as at September 30, 2021 927 (149) 9,244 10,022 435 10,457

For the three months ended September 30, 2020 (unaudited)

Share Accumulated Total capital other Retained share-holders' Non- controlling Total and comprehensive earnings (2) equity interests equity premium (1) income (loss)

Balance as of June 30, 2020 927 (201) 7,986 8,712 373 9,085

Net profit for the period - - 201 201 12 213

Other comprehensive income (loss), after tax - 31 - 31 (1) 30effect

Balance as at September 30, 2020 927 (170) 8,187 8,944 384 9,328

For the nine months ended September 30, 2021 (unaudited)

Share Accumulated Total capital other Retained share-holders' Non- controlling Total and comprehensive earnings (2) equity interests equity premium (1) income (loss)

Balance as at December 31, 2020 (audited) 927 (183) 8,397 9,141 394 9,535

Net profit for the period - - 1,072 1,072 39 1,111

Dividend - - (225) (225) - (225)

Other comprehensive income, after tax effect - 34 - 34 2 36

Balance as at September 30, 2021 927 (149) 9,244 10,022 435 10,457

For the nine months ended September 30, 2020 (unaudited)

Share Accumulated Total capital other Retained share-holders' Non- controlling Total and comprehensive earnings (2) equity interests equity premium (1) loss

Balance as at December 31, 2019 (audited) 927 (131) 7,772 8,568 356 8,924

Net profit for the period - - 540 540 29 569

Dividend - - (125) (125) - (125)

Other comprehensive loss, after tax effect - (39) - (39) (1) (40)

Balance as at September 30, 2020 927 (170) 8,187 8,944 384 9,328

STATEMENT OF CHANGES IN EQUITY (CONT'D)

(NIS million)

For the year ended December 31, 2020 (audited)

Share Accumulated capital other Retained Total Non- controlling Total and comprehensive earnings (2) interests equity premium (1) loss

Balance as at December 31, 2019 927 (131) 7,772 8,568 356 8,924

Net profit for the year - - 750 750 38 788

Dividend - - (125) (125) - (125)

Other comprehensive loss, after tax effect - (52) - (52) - (52)

Balance as at December 31, 2020 927 (183) 8,397 9,141 394 9,535

* Immaterial adjustment of comparative data.

(1) Including share premium of NIS 313 million (as from 1992 onwards).

(2) Including an amount of NIS 2,391 million which cannot be distributed as dividend.

Contact:

Dafna ZuckerFirst International Bank of Israel e-mail: zucker.d@fibi.co.ilTel: +972-3-519-6224

Ehud HelftGK Investor & Public Relations e-mail: fibi@gkir.comTel: +1-646-201-924

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SOURCE First International Bank of Israel