Bank Leumi profit up 8% in 2019

Bank Leumi (TASE: LUMI) has reported its financial results for the fourth quarter and full year 2019. Net profit in 2019 climbed to NIS 3.522 billion ($1.019 billion) in 2019, up 8.1% from NIS 3.257 billion ($942 million) in 2018.

Return on equity in 2019 reached 9.8%, compared with 9.5% in 2018. Excluding the effect of Leumi Card, the return on equity in 2019 was 9.2%, compared with 9% in 2018. Common Equity Tier 1 capital ratio as at December 31, 2019 was 11.88%, and the total capital ratio reached 15.67%.

Bank Leumi's efficiency ratio continues to improve - a 56.8% ratio in 2019, compared with 60.6% in 2018. Excluding the effect of Leumi Card - the efficiency ratio was 58.1% in 2019, compared with 60.5% in 2018. During 2019, the Bank implemented an additional efficiency plan, under which 400 employees retired voluntarily from the Bank at the end of the year.

Bank Leumi CEO Hanan Friedman said, "The results we present today clearly demonstrate that the bank’s strategy in the past few years has proven itself, and that Leumi is prepared, more than ever, to cope with the formidable changes and challenges facing the banking industry. The infrastructure we have built in recent years will allow us to continue implementing our successful strategy into 2020, while significantly boosting the adaptation of our service model to our customers’ characteristics and needs - with an emphasis on responsible growth - and maintaining a high quality credit portfolio. Responsible growth will be achieved, inter alia, by enhancing the use of smart models, which allow us to predetermine our customers’ needs, across all business lines. Alongside continuing to invest in the digital domain and leveraging our data capabilities for core business growth, we will continue to implement new technological measures, including robotizing processes, for the sake of smart efficiency and enhanced operations."

He added, lately, we became the first Israeli bank to raise Tier-2 subordinated notes from foreign investors. The unprecedented demands, in addition to the low spreads, reflect the exceptional trust of investors from around the globe in the Israeli economy and in Bank Leumi’s robustness."

Leumi will distribute a NIS 297 million ($86 million) dividend. Since the beginning of 2019, dividend and share buyback totaled NIS 2.1 billion ($608 million). The Bank’s board of directors has approved an additional share buyback plan for 2020 of up to NIS 700 million ($203 million).

Published by Globes [online], Israel business news - en.globes.co.il - on February 26, 2020