TEL AVIV, Israel, March 12, 2024 /PRNewswire/ — First International Bank of Israel (TASE: FIBI) one of Israel’s major banking groups, today announced its results for the fourth quarter and full year period ended December 31, 2023.
Financial Highlights
Net income of NIS 2,172 million in the year 2023; Return on equity 19.7%
Net income of NIS 499 million in the fourth quarter of 2023; Return on equity – 17%
Credit to the public grew by 1.8% in the year 2023
Deposits from the public grew by 13.6% in 2023
The customers’ assets portfolio grew by 20% to NIS 672 billion
Tier-1 shareholders’ equity ratio of 11.35% and a liquidity coverage ratio of 156%
The Bank’s Board of Directors decided to distribute a dividend of NIS 269 million
Financial Results for the fourth quarter and full year 2023
The First International Bank today published its financial statements for the year 2023, which reflect a high level of profitability combined with the continued financial stability:
The First International Group’s net income amounted to NIS 2,172 million in 2023, an increase of 30.3% by comparison with 2022. The return on equity was 19.7%, by comparison with 16.6% in 2022.
In the fourth quarter of the year, the net income amounted to NIS 499 million, an increase of 9.7% by comparison with the third quarter of 2023 and a decrease of 6.9% by comparison with the fourth quarter in the previous year. The return on equity was 17%.
Total revenue amounted to NIS 6,618 million in the year 2023, an increase of 22.2% by comparison with 2022. Financing income from operating activities increase by 28.3% in the year 2023, amounting to NIS 5,151 million, with the increase due primarily to the impact of the increase in shekel and dollar interest rates and the impact due to the general broadening in the scale of the Bank’s operating activity.
Provision for credit losses amounted to NIS 502 million in the year 2023, representing 0.42% of the credit portfolio, an increase of NIS 379 million in comparison with 2022. There was an increase of NIS 337 million in the collective allowance for credit losses in 2023, primarily as a result of increased macro-economic uncertainty, in light of the uncertainty of economic conditions, due, among others, as a result of the repercussions of the war in Israel, the rise in interest rates and the potential for an economic slow-down.
High quality credit portfolio – the bank has a low ratio of non-performing loans. This ratio indicates the quality of the credit portfolio (measuring the balance of debts that are non-accrual or which are in arrears of 90 days or out of the credit to the public), and it remained at low levels and stood at 0.6%. In addition, over the past year, the Bank increased the overall coverage ratio (defined as the ratio of the overall allowance for credit losses to the Bank’s total amount of credit to the public) from a rate of 1.12% to a rate of 1.5%.
Operating and other expenses amounted to NIS 2,877 million in the year 2023, an increase of 4.4% in comparison with 2022. This was primarily due to an increase in current salaries, as well as an increase in computing, marketing and advertising expenses.
In 2023, the efficiency ratio improved to 43.5%, by comparison with 50.9% in 2022. The bank continued to invest in efficiency programs, which include, among others, streamlining work processes, integrating automation into processes and implementing technological innovation.
Credit to the public increased by a rate of 1.8% by comparison with the same period in 2022 and amounted to NIS 119,240 million.
Deposits from the public have grown at a rate of 13.6% over the past year and amount to NIS 191,125 million.
The total customer assets portfolio increased by 20% in the past year and amounts to NIS 672.1 billion.
Equity attributed to the Bank’s shareholders increased to NIS 12,071 million, an increase of 14.3% in comparison with 2022.
The tier 1 capital ratio increased to 11.35%, in comparison with 10.42% at the end of 2022.
The liquidity coverage ratio increased to 156%, in comparison with 127% at the end of 2022.
Considering the directives of the Supervisor of Banks in Israel regarding “Planning of equity and the profits distribution policy” and taking into account the background of a high level of uncertainty in the markets in Israel in the wake of the war, as well as the ongoing level of uncertainty in the global markets, the Bank’s Board of Directors approved a cash dividend distribution of NIS 269 million to shareholders, reflecting a distribution of a dividend at a rate of 50% of the net income in the first half of 2023 and at a rate of 20% of the net income in the second half of 2023.
Looking ahead, the Bank’s Board of Directors will continue to evaluate the Bank’s dividend distribution policy, in response to developments and their impact on both the economy and on the Bank.
CONDENSED PRINCIPAL FINANCIAL INFORMATION AND PRINCIPAL EXECUTION INDICES
Principal financial ratios
2023
2022
2021
2020
2019
percent
Execution indices
Return on equity attributed to shareholders of the Bank
19.7
16.6
14.7
8.6
10.5
Return on average assets
1.0
0.89
0.82
0.49
0.63
Ratio of equity capital tier 1
11.35
10.42
11.46
11.18
10.81
Leverage ratio
5.26
5.19
5.34
5.29
5.81
Liquidity coverage ratio(1)
156
127
128
150
128
Net stable funding ratio(2)
146
133
139
Ratio of total income to average assets
3.2
2.9
2.6
2.7
3.0
Ratio of interest income, net to average assets
2.4
2.0
1.6
1.7
1.9
Ratio of fees to average assets
0.7
0.8
0.8
0.9
0.9
Efficiency ratio
43.5
50.9
58.3
61.8
64.4
Credit quality indices
Ratio of provision for credit losses to credit to the public
1.36
1.02
1.05
1.38
1.05
Ratio of total provision for credit losses (3) to credit to the public
1.50
1.12
1.13
1.48
1.11
Ratio of non-accruing debts or in arrears of 90 days or more to credit to the public
0.60
0.48
*0.63
0.86
1.08
Ratio of provision for credit losses to total non-accruing credit to the public
234.5
219.7
*244.0
221.3
131.2
Ratio of net write-offs to average total credit to the public
0.03
0.03
(0.01)
0.10
0.10
Ratio of expenses (income) for credit losses to average total credit to the public
0.42
0.11
(0.23)
0.52
0.16
Principal data from the statement of income
2023
2022
2021
2020
2019
NIS million
Net profit attributed to shareholders of the Bank
2,172
1,667
1,405
750
865
Interest Income, net
4,966
3,803
2,794
2,637
2,602
Expenses (income) from credit losses
502
123
(216)
464
138
Total non-interest income
1,652
1,611
1,756
1,523
1,520
Of which: Fees
1,502
1,489
1,444
1,371
1,286
Total operating and other expenses
2,877
2,755
2,652
2,569
2,654
Of which: Salaries and related expenses
1,746
1,680
1,601
1,532
1,601
Primary net profit per share of NIS 0.05 par value (NIS)
21.65
16.62