Bank Leumi (TASE: LUMI), headed by Rakefet Russak-Aminoach, continued to produce good results in the second quarter this year. The bank posted a profit of NIS 903 million for the quarter, 3% more than in the corresponding quarter of 2017. The profit gives a return on equity of 11.1%, which is likely to be the highest return among Israel's banks for the second quarter, since Mizrahi Tefahot Bank (TASE:MZTF), which usually takes that title, will have to record a substantial provision against penalties that may result from the investigation into its affairs in the US. For the first half-year, Bank Leumi posted a profit of NIS 1.63 billion, 9% more than in the first half of 2017.
Finance income in the second quarter jumped 11% to NIS 2.41 billion, helped by the rise in the Consumer Price Index and growth in the credit portfolio, as well as by a drop in provisions for doubtful debts from NIS 42 million to NIS 14 million. At the end of the quarter, the bank's provision for doubtful debts stood at NIS 116 million, just 0.1% of the value of the portfolio.
Non-interest finance income, however, fell from NIS 197 million in the corresponding quarter to NIS 89 million in the current quarter.
Bank Leumi's salary expense rose 9.7% in the second quarter to NIS 1.22 billion. The rise was mainly due to a bonus paid to the bank's employees for their part in the streamlining process that it is undergoing.
Bank Leumi will pay a dividend of NIS 361 million for the second quarter. The bank has also begun a NIS 700 million share buyback program. So far, it had bought back its own shares to the tune of NIS 303 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2018
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