Bank Leumi (TASE: LUMI) published its financial report for the fourth quarter and full-year 2012 including losses for the fourth quarter, which far exceeded its profit warning.
The bank lost NIS 259 million in the fourth quarter - far more than the profit warning earlier this month which cited a figure of NIS 100 million. This is the bank's first loss since the third quarter of 2008 when the financial crisis was at its peak. In the corresponding quarter of 2011, the bank reported a profit of NIS 618 million. The bank had said in its profit warning that the bank's results were not known and had not been taken into account.
Two major factors caused the loss. Firstly the setting aside of NIS 400 million for an investigation by the US federal tax authorities that Bank Leumi Switzerland allegedly aided customers in evading taxes between 2001 and 2010, and which is expected to end in a heavy fine. Secondly, the bank set aside NIS 323 million for streamlining including major layoffs and early retirements.
On the other hand, the losses were attenuated by a rise in income from interest in 2012 to NIS 301 million, and a rise in non-interest related income to NIS 599 million.
The salary cost of CEO Rakefet Russak-Aminoach in 2012 was NIS 5.15 million of which NIS 2.06 million was the basic salary, while the salary cost of chairman David Brodet was NIS 3.3 million.
In full year 2012, the bank made a net profit of NIS 931 million ($249 million) for the Leumi Group in 2012. Net return on equity for 2012 was 3.8% and net interest income rose 4.2% in 2012 and totaled NIS 7.4 billion ($2.0 billion). Non- interest income rose 14.3% and totaled NIS 4.8 billion ($1.3 billion). The rise in balance sheet items included an increase of NIS 10.3 billion ($2.8 billion) in total assets, a rise of 2.8%, and deposits of the public increased by NIS 10.1 billion ($2.7 billion), a 3.6% rise.
The Bank’s capital adequacy ratio reached 14.87% at the end of 2012, of which the core capital ratio was 8.55%.
Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2013
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