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Mizrahi Tefahot, Leumi join parade of record bank profits

  • March 14, 2023

The annual reports of the banks continue to present record results. This morning, Bank Leumi reported a NIS 7.7 billion net profit for 2022, 28% more than in 2021. The net profit for the fourth quarter was NIS 2.3 billion, which compares with NIS 1.5 billion in the corresponding quarter of 2021.

Mizrahi Tefahot Bank also posted a record profit last year, of NIS 4.47 billion, 40.3% higher than its profit for 2021. The net profit for the fourth quarter was 60.1% higher than in the corresponding quarter, at NIS 1.1 billion.

The banks’ high profits in 2022 mainly arose from continued growth in their credit portfolios accompanied by rising interest rates.

In 2022, the Consumer Price Index in Israel rose by 5.3%, after a rise of 2.8% in 2021. The Bank of Israel’s interest rate, which was still 0.1% at the end of the first quarter of 2022, rose to 3.25% by the year’s end. Since then, the Bank of Israel has hiked its rate twice more, and it now stands at 4.25%.

Mizrahi Tefahot, the largest bank in Israel’s mortgage market, naturally posted a substantial rise in interest income, as the interest rate rises increased the average monthly mortgage repayment by about NIS 1,000. Mizrahi Tefahot recorded interest income of NIS 10.24 billion in 2022, 33% more than in 2021. In the final quarter of the year, interest income totaled NIS 3 billion, a massive 51% more than in the corresponding quarter of 2021.

“Although in the last few months of the year demand in the real estate market and hence for housing loans moderated, 2022 was a record year for mortgages,” said Mizrahi Tefahot Bank CEO Moshe Lary. “Despite the fierce competition and the changes in the operating environment, Mizrahi Tefahot continues to maintain its status as Israel’s leading bank for mortgages. In 2022, the bank extended new loans for housing and for all purposes amounting to NIS 41 billion.”

Bank Leumi also benefitted from the rise in interest rates of course. Leumi’s interest income totaled NIS 13.2 billion in 2022, 27.7% more than in 2021. Leumi’s net financing income in 2022, excluding the results of Leumi USA, which was sold to Valley National Bancorp of the US last year, totaled NIS 14.4 billion, 28% more than in 2021.

The rise in Bank Leumi’s financing income was principally a result of growth in its credit portfolio and rises in inflation and interest rates, but the 2022 figure includes NIS 782 million from the sale of Leumi USA, while in 2021 the figure included NIS 518 million from the sale of shares in Retailers and ironSource.

Published by Globes, Israel business news – – on March 14, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

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