On the eve of the transfer of control in a target=new href=http://www.bankotsar.co.il/>Bank Otsar Hahayal to First International Bank of Israel (TASE: FTIN1;FTIN5), Bank Otsar Hahayal has published its financial report for the second quarter of 2006. The bank showed strong growth in net profit, a drop in its provision for doubtful debts, a rise in its financial spread and profit from the business sector, and an increase in operating revenue.
Bank Otsar Hahayal posted a net profit of NIS 24.1 million for the second quarter, up 29% on the corresponding quarter of 2005. The bank posted a net profit of NIS 42.8 million for the first half of the year, compared with NIS 28.7 million for the first half of last year. The bank’s return on equity was 15.3% for the first half, compared with 10.5% for the first half of last year and 11.1% for 2005 as a whole.
On Thursday, Bank Otsar Hahayal will officially change hands from Bank Hapoalim (LSE: BKHD; TASE: POLI) to First International Bank.
Bank Otsar Hahayal’s balance sheet total was NIS 10.2 billion at the end of June 2006, compared with NIS 10.3 billion at the end of 2005, after it distributed a net NIS 80 million dividend as part of the sale of the bank. Due to tax considerations, NIS 430 million was distributed, while at the same time, NIS 350 million in additional shares were issued to existing shareholders.
Bank Otsar Hahayal’s revenue from commissions rose in all sectors. The bank made NIS 15.5 million in commissions for arranging customers’ credit frameworks under Bank of Israel Regulation 325, compared with NIS 11.7 million in the half of 2005. Revenue from commissions on capital market transactions rose 10.7% to NIS 16.5 million, and revenue from credit cards rose 12.9%.
The bank’s profit from financing activity totaled NIS 172.3 million in the first half of 2006, compared with NIS 154.3 million in the corresponding period of last year.
Bank Otsar Hahayal’s specific provision for doubtful debts was well below the average in the banking system, amounting to 0.08% in the first half of the year, compared with 0.11% in the first half of last year. The bank’s current provision for doubtful debts totaled NIS 14 million for the second quarter, compared with NIS 16.7 million for the corresponding quarter.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006