Abeles: The slowdown in economic activity may reduce bank profitability in the coming years.
The slowdown in economic activity and market growth may reduce bank profitability in the coming years, says Supervisor of Banks Ze'ev Abeles.
Abeles believes that possible changes in the restrictive monetary policy and the capital market, are also liable to reduce bank profitability in the future.
The 1996 Statistical Yearbook on the Israeli Banking Corporations, to be published next Sunday, determines that overall post-tax profitability for Israel’s five major banks was 8.6% last year, compared with 8.4% in 1995 and 7.3% in 1994. Total net profit for Israel’s five major banks was NIS 2 billion in 1996, compared with NIS 1.8 billion in 1995 and NIS 1.5 billion in 1994. This indicates growth of 11% I n1996 and 20% in 1995.
In the annual survey, Abeles states that an examination of the financial results for the five major banks indicates that in 1996 the banks reached a far higher average level of profitability than the 5.7% achieved in the 1985-1995 period. It should be noted that the average level of profitability in 1992-1996 was 8.4%, compared with 3.4% in the 1986-1991 period.