First International Bank of Israel (FIBI) (FIBI.TA), opens new tab reported a 7% decline in quarterly net profit, hurt by a more than tripling of its provision to protect against future loan defaults due to economic uncertainty during Israel’s war with Hamas militants.
FIBI, Israel’s fifth-largest bank, on Wednesday also said it would pay a quarterly dividend of 269 million shekels, 50% of the net income in the first half of 2023 and at a rate of 20% of the net profit in the second half of last year.
“Looking ahead, the bank’s board 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,” it said.
Net profit for the fourth quarter was 499 million shekels ($137 million), down from 536 million shekels a year earlier.
FIBI said it had 166 million shekels in credit loss expenses in the quarter versus 49 million the previous year. Net financing income slipped 2.7% to 1.2 billion shekels.
The bank’s Tier 1 capital ratio stood at 11.35% in 2023 versus 10.42% at the end of 2022.
In 2023, net profit rose 30% to 2.17 billion shekels for a return on equity of 19.7%.
Chief Executive Eli Cohen said the bank entered the current challenging period, in which Israel’s war with Hamas began on Oct. 7, from a position of strength, with high capital buffers and liquidity ratios and a “high quality, diversified credit portfolio.”
“Once the current crisis ends, we believe that it will enable the bank to grow and support the needs of the economy, in accordance with the bank’s policies,” he said.
($1 = 3.6496 shekels)
