Leumi provides NIS 190m more for Swiss probe

Bank Leumi still posted a profit of NIS 555 million for the third quarter, 16% up on the corresponding period.

Bank Leumi (TASE: LUMI) has increased its provision for the investigation by the US authorities into its activity in Switzerland. Last night, the bank released its results for the third quarter of 2013, which show that it made a further NIS 190 million provision against possible liabilities resulting from the investigation. In 2012, the bank made provisions totaling NIS 340 million for this contingency, and altogether it has provided NIS 530 million.

The investigation began two and a half years ago. The US authorities are investigating several banks that operate in Switzerland, on the suspicion that they assisted US customers in avoiding taxes in the US. Bank Hapoalim (TASE: POLI) and Mizrahi Tefahot Bank (TASE:MZTF) are also under investigation, but in the case of Bank Leumi the investigation is at a more advanced stage, and as far as is known, it is the only Israeli bank to have made related provisions.

Despite this provision, however, Bank Leumi released good financials, showing a net profit of NIS 555 million, 16% more than in the corresponding quarter of 2012. In the first nine months of 2013, Bank Leumi earned NIS 1.6 billion, 34% more than in the corresponding period of 2012. The bank's return on capital was 8.5%, compared with 6.5% in the corresponding period.

Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2013

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

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