After settling the fine it will pay to the US authorities, Mizrahi Tefahot Bank (TASE:MZTF) , managed by CEO Eldad Fresher, reported a NIS 404 million net profit in the first quarter of 2019, double its profit in the preceding quarter and 18% more than in the first quarter of 2018. Excluding one-time expenses for the US investigation, however, the bank's profit in the fourth quarter of last year was NIS 378 million and its profit in the second quarter of 2018 was greater than in the first quarter of this year.
Mizrahi Tefahot Bank reached a settlement with the US Department of Justice in its abetting of tax evasion by its US customers in which it will pay a $195 million fine (fully provided for in the bank's previous reports). Due to the effect of the agreement with the US, Mizrahi Tefahot Bank did not distribute a dividend on its profit in the fourth quarter of last year and will not distribute one for the first quarter of this year. Nevertheless, Mizrahai Tefahot Bank's board of directors and Fresher predict that the bank "will resume distribution of a dividend on its profits in the second quarter of 2019."
The profit in the first quarter of 2019, a result of strong revenue growth, represents an annualized 11.3% return on equity, compared with a 10.3% return on equity in the first quarter of 2018. Mizrahi Tefahot Bank reported a 10.12% ratio of tier-1 equity, the bank's third straight in which this ratio exceeded 10%. The last time the bank failed to achieve this was in the second quarter of 2018.
Published by Globes, Israel business news - en.globes.co.il - on May 20, 2019
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