The provisions made by Bank Leumi (TASE: LUMI) for the decline in value of its shares in Valley National Bank lopped 8% off its second quarter profit, which totalled NIS 2.3 billion. The bank announced last month that it would make a write down because of the fall in the share price of the US bank, in which it holds a 14% stake. The write down amounted to NIS 600 million. Excluding the write down, Bank Leumi’s return on equity in the second quarter was an annualized 20.2%.
Because of the write down, Bank Leumi’s second quarter profit was 18% lower than the profit in the first quarter of NIS 2.8 billion.
Bank Leumi has announced a cash dividend of NIS 681 million. In addition, the bank will buy back its shares to the tune of NIS 227 million. The dividend and share buyback together amount to 40% of the quarterly profit.
Net interest income in the second quarter was NIS 4.8 billion, representing a rise of 2.2% in comparison with the second quarter of 2023. Like Bank Hapoalim, which reported earlier today, Bank Leumi recorded income on its credit loss provisions item, amounting to NIS 18 million, thanks to recoveries of loans previously written off. In the corresponding period last year, the bank recorded a NIS 318 million expense on this item.
Credit to the public totalled NIS 433.8 billion at the end of the second quarter, representing a 5.9% year-on-year rise. Deposits from the public rose 8.8% year-on-year, to NIS 581 billion.
Published by Globes, Israel business news - en.globes.co.il - on August 14, 2024.
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