Higher salary cost cuts into FIBI profit

Fourth quarter net profit falls 8 percent from NIS 152m. for the corresponding quarter of 2009.

First International Bank of Israel on Thursday posted its highest quarterly net profit of the year for the fourth quarter, at NIS 140 million. However, higher salary costs weighed on the bank’s full-year profit.
Fourth quarter net profit fell 8 percent from NIS 152m. for the corresponding quarter of 2009, which included a one-time gain of NIS 82m. from the sale of the bank’s holdings in HOT Telecommunication Systems Ltd. and Bezeq Israeli Telecommunication Co. Ltd.
First International Bank’s full-year net profit fell 15% to NIS 484m., from NIS 568m. in 2010, for the same reason. Additional factors weighing on the 2010 results were a NIS 58m. loss on derivatives operations and a NIS 59m. increase in the bank’s salary cost.
First International Bank’s return on equity fell to 8% for 2010, from 9.7% for 2009, its lowest return in five years (with the exception of 2008, due to the financial crisis). Fourth-quarter return on equity was 9.7%, compared with 8.6% for the preceding quarter and 10.3% for the corresponding quarter.
Net operating profit fell 14.7% to NIS 466m. in 2010, from NIS 546m. in 2009. Fourth-quarter net income from financing operations fell 8% to NIS 138m.
First International Bank’s salary cost rose 5.7% to NIS 1.55 billion in 2010. Income from fees rose 1.3% to NIS 1.4b.
Income from financing operations before provision for doubtful debts rose 1.9% to NIS 2.21b.
in 2010, from NIS 2.16b. in 2009. The provision for doubtful debts fell 57% to NIS 115m. for 2010, from NIS 286m. for 2009. The fourth-quarter provision for doubtful debts fell 12% to NIS 42m. compared with the corresponding quarter.
Despite the lower profit, First International Bank CEO Smadar Barber-Tsadik’s income rose to NIS 6.3m. in 2010, from NIS 4m. in 2009.