Mizrahi Tefahot Bank (TASE:MZTF) today reported its results for the fourth quarter and full year of 2018. The bank reported a NIS 1.206 billion net profit, reflecting an 8.5% return on equity. The profit includes provisions for the investigation by the US Department of Justice. Mizrahi Tefahot Bank's revenue rose from NIS 6 billion in 2017 to NIS 6.889 billion in 2018, a 14.8% increase.
Mizrahi Tefahot Bank CEO Eldad Fresher said, "The signing of a settlement with the US Department of Justice following a five-year investigation, and the provisions made for it, naturally affected the results reported for 2018. On the other hand, without these provisions, the bank would have reported an 11.6% return on equity, while the target for return on equity in the strategic plan is 11.5%.
"Continued growth and expansion in a variety of fields of activity is further proof of the bank's strength and the extraordinary commitment of its employees and managers."
Together with the publication of its results, Mizrahi Tefahot Bank issued a report to the Tel Aviv Stock Exchange (TASE) saying that Supervisor of Banks Dr. Hedva Ber had ordered the bank to establish an independent committee to examine the settlement reached with the US authorities, in which it had to pay a $195 million fine.
Mizrahi Tefahot Bank's profit in the third quarter of 2018 totaled NIS 400 million, over 17% more than in the third quarter of 2017. The bank's fourth quarter net profit was NIS 121 million. The total provision in 2018 for the investigation was NIS 546 million.
Mizrahi Tefahot Bank made a NIS 425 million ($117 million) provision in the third quarter for the US Department of Justice investigation into suspected abetting of tax evasion by Mizrahi Tefahot's customers.
In the second quarter, Mizrahi Tefahot Bank announced that it would not distribute a dividend on its profit in the third quarter, in accordance with its announcement over a year before that it would distribute no more dividends until further notice in order to improve its capital adequacy ratio.
Published by Globes, Israel business news - en.globes.co.il - on March 28, 2019
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