Bank Leumi (TASE: LUMI) released its financial statements for the fourth quarter of 2020 and for the year as a whole this morning.
At NIS 2.1 billion, the bank's net profit for 2020 was 40% below the profit for 2019. The decline was mainly because of a substantially higher expense for credit losses, mainly in the form of a general provision, and from lower non-interest financing income, which in 2019 included NIS 314 million income from the sale of credit card company Leumi Card.
For the fourth quarter, net profit rose to NIS 890 million from NIS 794 million in the fourth quarter of 2019. Return on equity in the fourth quarter was 9.8%, which compares with 8.7% in the fourth quarter of 2019.
For 2020 as a whole, return on equity was 5.7%, down from 9.8% in 2019. The decline is attributable to credit losses arising from the effects of the coronavirus pandemic. The credit loss expense for 2020 was NIS 2.6 billion, which compares with NIS 609 million for 2019. One third of the bank's mortgage borrowers whose repayments were frozen because of the pandemic have not yet resumed regular repayments.
Published by Globes, Israel business news - en.globes.co.il - on March 9, 2021
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