A one-time expense related to a provision for a voluntary retirement program led Mizrahi Tefahot Bank (TASE:MZTF) to record slightly lower net profit in 2009 compared with the full year of 2008.
The bank's fourth quarter profit jumped 93.8% compared to the corresponding quarter, to NIS 186 million.
Mizrahi recorded net profit of NIS 530 million in 2009, 12% lower than the NIS 602 million recorded in 2008. The drop was primarily due to a provision of over NIS 100 million for expenses related to a voluntary retirement program. In the summer, the bank signed an agreement with its workers committees, which gave it operating "quiet" through 2015.
Excluding the provision, Mizrahi's operating net profit was NIS 650 million in 2009, 8.2% higher than the previous year. The NIS 650 million operating profit reflects a return on equity of 10.4%, similar to 2008.
The bank's provision for doubtful debts (as a percentage of credit to the public) was 0.39%, down from 0.44% at the end of 2008.
Mizrahi's capital adequacy ratio was 14.25% under Basel II - The New Basel Capital Accord of the Basel Committee on Banking Supervision, and 12.57% under the older regulations. Its Tier 1 capital adequacy ratio was 8.01% under Basel II, and 7.07% under the earlier regulations.
Mizrahi CEO Eli Yones said that the bank's share of mortgages issued in 2009 was 36%, compared to 34% in 2008.
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010