Clal Finance Batucha analyst Yuval Ben-Zeev says that Mizrahi Tefahot Bank (TASE:MZTF) has been the bank least affected by the crisis. "The bank led by Eli Yones will be the only bank to report a reasonable profit for the fourth quarter of 2008. It will have a return on equity of 9-10% in 2009, and its capital adequacy ratio will reach the mandatory 12% before the end of the year."
Mizrahi Bank's share has fallen 30% since the beginning of the year, less than the shares of other banks. It is currently traded at an equity multiple of 0.78, the highest equity multiple among the banks. It terms of market cap, it has surpassed Israel Discount Bank (TASE: DSCT) to become the third largest bank.
Ben-Zeev says, "Mizrahi Tefahot's results will favorably stand out. I have no doubt that the bank will be hurt by the slowdown, but the bank can exploit the times to maximize its built-in advantages in retail banking and especially in mortgages."
Ben-Zeev has already said that Bank Hapoalim (TASE: POLI; LSE:80OA), Bank Leumi (TASE: LUMI), and Discount Bank will report dismal fourth quarter results and that they face an especially difficult year in 2009. He predicts that Bank Hapoalim and Bank Leumi will have a return on equity of 5-6% in 2009, and that Discount Bank will have a return on equity of 4%.
Ben-Zeev predicts that Mizrahi Tefahot Bank will post a net profit of NIS 126 million for the fourth quarter, giving a return on equity of 8.8%. He notes the bank's stability and that its provision for doubtful debts will amount to just 0.66% of its credit portfolio.
Published by Globes [online], Israel business news - www.globes-online.com - on February 12, 2009
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