An increase in revenue from fees, the sale of holdings in Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Hot Cable Systems Media Ltd. (TASE: HOT), and an increase in financing profits all helped First International Bank of Israel (TASE: FTIN1;FTIN5) to report a net profit of NIS 558 million in 2009, up 252% from the NIS 161 million in 2008. The bank's return on equity rose to 9.7% for 2009 from 2.9% for 2008.
First International Bank's capital adequacy ratio was 14.2% at the end of 2009, up from 12.3% a year earlier. The capital adequacy ratio under Basel II - The New Basel Capital Accord of the Basel Committee on Banking Supervision will fall to 14%. The Tier-1 capital adequacy ratio rose to 9.9% at the end of 2009 from 8.7% a year earlier.
A 16.5% increase in First International Bank's financing profit before the provision for doubtful debts to NIS 2.16 billion in 2009 from NIS 1.86 billion in 2008, contributed to the bank's profit. Although the financing spread narrowed to 1.07% in 2009 from 1.22% in 2008, because of the low prevailing interest rate, the bank's nostro activity helped boost the financing profit thanks to stock market rally. Nostro activity contributed NIS 290 million to the financing profit in 2009, compared with a loss of NIS 37 million in 2008
The provision for doubtful debt rose 12.6% to NIS 268 million in 2009 from NIS 238 million in 2008.
Operating and other revenue rose 30% to NIS 1.76 billion in 2009 from NIS 1.36 billion in 2008 and revenue from fees rose 7.5% to NIS 1.42 billion from NIS 1.32 billion. The bank reported a capital gain of NIS 223 million from the sale of its holdings in Bezeq and HOT.
First International Bank CEO Smadar Barber-Tsadik said, "During 2009 and early 2010, we successfully completed the conversion of the computer systems of Ubank Ltd. and Bank Massad to First International's system. With the pending conversion of Bank Otsar Hahayal, the conversion of the whole group will be completed, and the group's five banks will operate on a single computer platform with a great advantage in terms of marketing and efficiency."
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2010
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