Union Bank of Israel (TASE: UNON), Israel's sixth largest bank, today became the first bank to publish its financial report for the fourth quarter and full year of 2009.
Union Bank posted a net profit of NIS 115 million in 2009, 113% more than the net profit of NIS 54 million in 2008. Profit from ordinary operations rose 117% to NIS 117 million in 2009, NIS 54 million in 2008, when there was no profit or loss from extraordinary activity.
Financing profit before the provision for doubtful debt rose 6.7% to NIS 619 million in 2009 from NIS 580 million in 2008. The provision for doubtful debt rose 1.1% to NIS 95 million in 2009 from NIS 94 million in 2008.
Union Bank's return on equity was 6.6% in 2009 compared with 3.4% in 2008.
Union Bank attributed the increase in its profit from financing activity to the wider financing margin from higher credit risk premiums and margin on bond holdings in the bank's securities portfolio. The bank had NIS 9 million in financing profit, mostly from options trading, compared with a financing expense of NIS 47 million in 2008.
Union Bank's capital adequacy ratio was 13.94% at the end of 2009 under Basel II - The New Basel Capital Accord of the Basel Committee on Banking Supervision, and 14.28% under Basel I regulations. The bank's tier-1 capital adequacy ratio was 8.69% under Basel II and 9.03% under Basel I.
Union Bank said that it would not distribute a dividend in 2008, in line with the Bank of Israel's position on the matter and because of economic uncertainty and its ramifications on the bank's business environment.
Credit to the public rose 2.8% to NIS 19.05 billion at the end of 2009 from NIS 18.54 billion a year earlier. Deposits from the public fell 10% to NIS 25 billion from NIS 26.65 billion.
Union Bank's share price fell 0.7% to NIS 19.29, giving a market cap of NIS 1.43 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 25, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010