First International Bank of Israel (TASE: FTIN) released its 2014 financial statements this morning. The bank posted a net profit of NIS 478 million, which compares with a profit of NIS 555 million for 2013, and represents a decline of 13.9%.
The bank's return on equity was 7% in 2014. For the fourth quarter, it posted a profit of NIS 61 million.
The bank said that its profit for the fourth quarter was affected by several one-time regulatory and accounting directives imposed on it, among them a directive from the Supervisor of Banks on the general provision against consumer credit which led to a NIS 45 million rise in the credit loss provision and a NIS 28 million reduction in net profit.
In 2014, the bank also started to implement new rules on accounting for software costs that set a minimum threshold for capitalization of such costs and a reduced amortization period. The effect of these changes was a NIS 18 million reduction in profit before tax in 2014. The change will continue to affect profits in the coming years.
Implementation of a collective agreement led to a NIS 16 million rise in salary costs at the bank in the fourth quarter, and a NIS 10 million reduction in net profit.
The cumulative effect of these three factors was NIS 49 million in 2014, and NIS 41 million in the fourth quarter.
Revenue from interest and non-interest financing revenue totaled NIS 2.33 billion in 2014, 2.3% less than in 2013, mainly because of the decline in Bank of Israel interest rates.
The credit loss expense totaled NIS 89 million in 2014, compared with NIS 97 million in 2013, and amounted to 0.13% of credit to the public.
The salary cost of First International Bank chairman Rony Hizkiyahu was NIS 3.43 million, and that of CEO Smadar Barber-Tsadik was NIS 4.27 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 9, 2015
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