The five largest banks in Israel – Leumi, Hapoalim, Discount, Mizrahi Tefahot and International – earned NIS 6.1 billion in the third quarter, 30% more compared to the same period last year.
From January until September 2022, the surplus amounted to NIS 17.2 billion, a 20% increase compared to the corresponding period.
Bank Leumi, managed by Hanan Friedman and chairman Samer Haj Yehia, was the last of the banks to publish its third-quarter reports. The bank earned NIS 1.78 billion in this quarter, a 15% increase compared to the corresponding period. The profit is a 14.9% return on capital.
Leumi finished September with a profit of 5.38 billion shekels, an increase of 18% compared to the corresponding period. The bank distributed a dividend of NIS 356 million for the quarter, and since the beginning of the year has distributed NIS 1.6 billion.
Leumi also recorded a jump of 17.9% in the credit portfolio. Surprisingly, it also presents the best efficiency ratio (expenses divided by revenue) in the system, which stands at 39.1%.
CEO Hanan Friedman said that these results show the successful implementation of a defined strategy achieved with fewer resources, through management that is cautious and aware of risks, alongside convenient, fair banking adapted to each customer’s needs in each service channel. The base is advanced technological tools, data and models.
How did the other banks do?
The reason for the increase in profits this quarter is a jump in financing profits. On the other hand, there was almost no increase in credit losses, despite signs of an economic slowdown. Thanks to profits, the banks distributed a quarterly dividend of NIS 1.66 billion in addition to what was already distributed.
Bank Hapoalim, managed by Dov Kotler, and Bank Leumi recorded the highest profit this quarter (NIS 1.785 billion for Poalim and NIS 1.782 for Leumi).
Mizrahi Tefahot had the highest rate of return on capital (20.8%) and in terms of leading financial variables, it took Discount's place as the third largest bank in the country.
Bank profits draw criticism in the political system. Chairman of the Finance Committee, MK Moshe Gafni, wants to promote legislation according to which the interest on mortgages won’t increase, even if the interest rate in the economy increases. This move has received sharp criticism from sources in the banking system.