Mizrahi Tefahot reports double-digit Q3 profit growth

A rise in mortgages contributed to Mizrahi Tefahot’s reported growth in 2013, while return on equity was 33%.

Mizrahi Tefahot Bank (TASE:MZTF) reported net profit of NIS 301 million for the third quarter of 2013, and a 13.3% return on equity.

In the third quarter of 2013 the bank’s net profit grew 15.8% compared with the corresponding quarter of 2012. Over the first three quarters of 2013, the bank reported a net profit of NIS 826 million, up 2.5% from the corresponding period of the previous year, after a non-recurring provision of NIS 191 million, due to the implementation of the Bank of Israel’s directive regarding mortgages.

Shareholders’ equity rose 12.5% to NIS 9.6 billion and loans to the public totaled NIS 136.7 billion, up 8%.

Mizrahi Tefahot CEO Eldad Fresher said: "We have succeeded in taking the next step by posting, for the first time, quarterly net operating profit better than NIS 300 million. This reflects the continued expansion of the bank’s business, with significant growth in loans and revenue. Financing revenue (interest and non-interest) totaled NIS 915 million in the third quarter, a year-over-year increase of 14.1%. In the first nine months of this year, financing revenue exceeded NIS 2.6 billion, an increase of 9.6%. The increase in revenue also reflects the bank's efficiency ratio (Cost-Income Ratio), which continues to be among the best in the Israeli banking system. For the first nine months of 2013, Bank Mizrahi Tefahot's cost-income ratio was a mere 57.7%, compared to 58.2% in 2012.”

Mizrahi Tefahot, the biggest player in Israel’s mortgage market, with a market share of 36%, posted growth of 17.8% in total loans for the first 9 months of 2013, for a total of NIS 16.7 billion, NIS 1.8 billion of which is in refinanced loans, and NIS 14.8 billion is in new loans. This despite the fact that the total number of borrowers dropped 1.2% to 35,000 borrowers (included those who refinanced). The average mortgage for the period was NIS 475,000, up from NIS 398,000 for the equivalent period of the previous year.

Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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