Bank Leumi (TASE: LUMI) unit Leumi Mortgage Bank Ltd. posted a net profit of NIS 131 million in 2009, 3.5% more than the NIS 126 million in 2008, but its net return on equity fell to 5.7% in 2009 from 6.1% in 2008.
Leumi Mortgage Bank's capital adequacy ratio was 9.66% at the end of 2009 under Basel I guidelines, and 16.32% under Basel II - The New Basel Capital Accord of the Basel Committee on Banking Supervision.
The salary cost of Leumi Mortgage Bank CEO Shuki Bourstein was NIS 1.9 million in 2009 and he received a performance bonus of NIS 469,000. His salary may increase even further, because as a Bank Leumi employee he is "on loan" to Leumi Mortgage Bank and part of his salary may be paid through Bank Leumi.
Leumi Mortgage Bank is Israel's second larges mortgage bank, with about a 25% market share. The bank's mortgage loans totaled NIS 8.96 billion in 2009, up 6.8% from NIS 8.36 billion in 2008, not including refinancing.
Leumi Mortgage Bank's credit to the public totaled NIS 43.7 billion at the end of 2009, 10% more than the NIS 39.8 billion a year earlier. Despite the increase, profit from financing operations fell 28% to NIS 310 million in 2009 from NIS 430 million in 2008, due to the prevailing low interest rate in the economy. Deposits from the public rose 10.3% to NIS 37.3 billion at the end of 2009 from NIS 33.8 billion a year earlier.
The bank recorded a NIS 20 million write-back on its provision for doubtful debts in 2009, compared with a provision of NIS 103 million in 2009.
Published by Globes [online], Israel business news - www.globes-online.com - on February 24, 2010
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