Leumi to pay out NIS 1.1b. dividend

Following the news of the dividend, Leumi's shares closed up 2.9% at NIS 16.82 on the Tel Aviv Stock Exchange.

December 6, 2005 07:57
2 minute read.
bank leumi 88

bank leumi 88. (photo credit: )


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Bank Leumi will pay a NIS 1.1 billion dividend to shareholders, representing about two-thirds of its net profit in the first nine months of the year. The payout goes beyond Leumi's policy of dividing at least 35% of net profit once a year, which is in contrast to Bank Hapoalim's practice of paying 50% of net profit every quarter. The company said on Monday it will pay 78 agorot a share on February 28 to shareholders who own the company's stock on February 15. Leumi reported last week that nine-month net profit increased 10.2% to NIS 1.67b. while earnings per share rose to NIS 1.18 from NIS 1.07 and return on equity increased to 15.2% from 14.5%. Following the news of the dividend, Leumi's shares closed up 2.9% at NIS 16.82 on the Tel Aviv Stock Exchange. The payout will represent a quick return for New York firms Cerberus Capital Management and Gabriel Capital, who last week closed a deal to buy a controlling stake in Leumi from the government. As the two members of the Barnea consortium, they paid NIS 2.47b. for a 9.99% stake and an 18-month option to buy another 10.01%, which will give them a combined 20% holding. A Leumi spokesman said that contrary to press reports, the dividend has nothing to do with the influx of cash the company is due to receive from the sale of its interests in mutual and provident funds. He added that it was too early to say whether Leumi would use that money for further dividends or for investment. The company has been selling operations to comply with the Bachar reforms, which were passed into law in July. Since September Leumi has agreed to deals worth more than NIS 3b.

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