First International Bank of Israel (TASE: FTIN), managed by CEO Smadar Barber-Tsadik, today reported its third quarter results, including a 48.8% rise to NIS 128 million in net profit. The bank's net profit for the first nine months of the year was NIS 409 million, 24.3% higher than in the corresponding period in 2015. Annualized return on equity was 7.6% since the beginning of the year, compared with 6.4% in the corresponding period last year, and an annualized 7.1% in the third quarter, compared with 5% in the third quarter of 2015.
First International reported a rise in net interest income thanks to growth in bank's credit to the public, which reached NIS 78.1 billion at the end of September, up 11.7%, compared with the end of September 2015.
First International's board of directors approved "a revision of the cost-cutting aspects of bank's strategic plan," including expansion of its digital business, a reduction in the number of its branches, less real estate space, and a reduction of the group's staff by 650 employees by 2020 (an average of 130 employees a year, including 45 under a voluntary early retirement program). This reduction comes on top of a past reduction of the group's staff by hundreds of employees, out of a total labor force of 4,682 as of the end of 2015. The bank stated, "The cost of the benefits granted to employees under the economizing program in 2016-2020 is estimated at NIS 207 million, before taxes. This total includes NIS 25 million for a gradual termination of activity reported as an expense in the second quarter of the year." Barber-Tsadik said, "The First International group revised both the growth and cost-cutting aspects of its strategic plan this year… these measures will take place gradually and judiciously, and will be part of the group's continued growth in its core business. This will improve the bank's efficiency ratio."
First International's ratio of tier-1 equity to its risk factors is 10.05%, while the bank also announced the distribution of a NIS 200 million dividend. The bank drew attention to the difficult straits of the Tel Aviv Stock Exchange (TASE), reporting a drop in revenue from fees "mostly as a result of a slowing in capital market business."
Published by Globes [online], Israel business news - www.globes-online.com - on November 17, 2016
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