Mizrahi Tefahot Bank : Immediate Report o​n the Distribution of a Cash Dividend to Securities​

MIZRAHI TEFAHOT BANK LTD

No. with the Registrar of Companies: 520000522

To	Israel Securities	To	Tel Aviv Stock Exchange Ltd	T081	Date of transmission:
	Authority			(Public)	August 12, 2019
	www.isa.gov.il		www.tase.co.il		Ref: 2019-01-083407

Immediate Report on the Distribution of a Cash Dividend to Securities

Regulation 37(a) of the Securities Regulations (Immediate and Periodic Reports), 5730-1970.

1. We hereby report that onAugust 12, 2019, the payment of a dividend for the company's securities was decided.
2. The total amount of the dividend which will be paid is:ILS 392,000,000
3. The balance of the corporation's profits as defined in Section 302 of the Companies Law,5759-1999, after the distribution proposed herein, is a total of ILS 13,370,000,000
4. The dividend distribution approval procedure
   At the Board of Directors meeting dated August 12, 2019 at 10:30.
   The above distribution is with the court's approval, according to Section 303 of the Companies Law No
5. The effective day (thecum-day):August 20, 2019
   Theex-day:August 20, 2019
   Date of payment: August 27, 2019
6. Payment details:

• A dividend distributed by a company residing in Israel (for the composition of the dividend's sources and tax rates, see section 7a).

 A dividend distributed by a real estate investment fund (for the composition of the dividend's sources and tax rates, see section 7c).

No. of	Name	of	Dividend	Currency	Payment	Exchange	% tax on	% companies tax
entitled	security	sum per	of	currency	rate	for	private
security			one	dividend		repayment	individuals`
			security	amount		in	respect
						of date
695437	Ordinary	1.6721123	ILS	ILS			25	0
	shares	of
	ILS	0.1
	par value
	each

• A dividend distributed by a company residing abroad (for tax rates, see section 7b).

1

No. of

Name

of

Gross sum

Sum

%

%

%

private

% companies tax

entitled

security

per

one

currency

foreign

convention

individuals'

balance

to

security

security

tax

tax

tax

balance

deduct in

the

to deduct in

country

the country

			Payment	Payment	Exchange rate for	% de facto	% de facto
			sum in the	currency	payment in respect of	private	companies tax
			country		date	individuals'
			per	one			tax
			security

The dividend amount to be paid must be indicated with an accuracy of up to 7 digits after the decimal point in respect of payment in ILS and up to 5 digits after the decimal point in case of payment in another currency.

Is the dividend amount per security final No

The amount of dividend per security is subject to changes due to an exercise of convertible securities, insofar as they may be.

7. The TDS rates specified below are for TASE members for tax deduction at the source.

7a. Composition of the sources of a dividend distributed by a company residing in Israel from equity and financial instruments except for REITs.

			% of the dividend	Private	Companies	Foreign residents
				individuals
Income subject to	100	25%	0%	25%
corporate
tax (1)
Income	which	0	25%	23%	25%
originated
abroad (2)
Income	from	0	15%	15%	15%
approved
enterprise/benefi
ciaries (3)
Income	from	0	15%	15%	4%
approved
enterprise
Ireland,	up	to
2013 (4)
Income	from	0	20%	20%	4%
approved
enterprise
Ireland,	since
2014 (5)
Preferred income	0	20%	0%	20%
Income	from	0	20%	20%	20%
approved
enterprise
touristic/agricult
ural (6)
Income	from	0	15%	0%	15%
approved
enterprise/benefi
ciaries which
delivered		a
waiver notice (7)
Distribution		0	25%	23%	0%
classified as
capital gain
Distribution	by	0	0	0	0
participating
unit

Other

0

0

0

0

Explanation:

1. Income subject to corporate tax: income due to revenue distribution or a dividend, the source of which is income produced or generated in Israel, received directly or indirectly from another group of persons owing companies tax.
2. Income which originated abroad is income produced or generated abroad that have not been taxed in Israel.
3. Including revenue from a beneficiary touristic enterprise with the selection/operation year being 2013 or prior.
4. A beneficiary enterprise in Ireland, for which the selection year is 2013 or prior.
5. A beneficiary enterprise in Ireland, for which the selection year is 2014 or after.
6. Including revenue from a beneficiary touristic enterprise with the selection/operation year being 2014 or after.
7. An approved enterprise or beneficiary which had delivered a notice of waiver until June 30, 2015, after the companies tax which it owed was deducted.

7b.	Dividend distributed by a company residing abroad
					Private		Companies		Foreign residents
					individuals
	Dividend distributed	25%		23%		0%
	by	a	company
	residing abroad
7c.	Dividend distributed by a real estate investment fund
				%	of	Private	Companies	Foreign	Exempt	Provident
				dividend	individuals		companies	mutual	fund (2)
						(1)				fund
	From	land			25%	23%	23%		0%	0%
	appreciation,
	capital gains and
	depreciation (3)
	Other	taxable			47%	23%	23%		23%	0%
	income	(e.g.
	rent)
	From	income-			20%	20%	20%		0%	0%
	producing land
	for	the	purpose
	of
	accommodation
	rental
	Income charged			25%	0%	25%		0%	0%
	by the fund (4)
	Extraordinary			70%	70%	70%		60%	70%
	income
	Other
	% of TDS -	100%
	weighted

1. Private individuals - including taxable income from a mutual fund, private individuals who are foreign residents.
2. A provident fund for annuity or remuneration or compensation, as defined in the Income Tax Ordinance, as well as a provident fund or a foreign pension fund which resides in a reciprocating state.
3. From land appreciation or capital gains, except for the sale of land held for a short period. As well as income in the sum of the depreciation expenses.
4. Distribution out of income taxed by the fund in accordance with Article 64a4 (e).

1. The number of the corporation's dormant shares which are not entitled to payment of dividend, and in respect of which a waiver must be produced with regard to the receipt of the dividend payment0
2. Effect of the dividend distribution on the convertible securities:
3. • The company has no convertible securities
   • The dividend's distribution has no effect on convertible securities

• The effect of the dividend distribution on convertible securities is as follows:

Name of security	No. of security	Comments
	00000000	Other
		The bank has a number of option
		plans, and the exercise price of the
		options which were granted will be
		reduced by the full dividend amount
		per share, as provided in Section 6
		above.

10. Directors' recommendations and decisions in connection with the dividend distribution in accordance with Regulation 37(a)(1) of the Securities Regulations (Immediate and Periodic Reports), 5730-1970:Regulation_37a_isa.pdf

The above report was signed by Mr. Menahem Aviv, Deputy CEO and Chief Accountant and Mr. Moshe Lari, Deputy CEO and CFO.

The reference numbers of previous documents on the subject (reference does not constitute incorporation by reference):

Securities of a Corporation Listed for Trading on	Form structure revision date: August 6, 2019
the Tel Aviv Stock Exchange
Abbreviated Name: Mizrahi Tefahot
Address:7 Jabotinsky Street, Ramat Gan, 52520	Tel:[phone]	Fax:[phone]
E-mail:	Company website:
[e-mail]	https://www.mizrahi-tefahot.co.il
Previous name of the reporting entity: United Mizrahi Bank Ltd
Name of the person reporting electronically:	Position:		Name of Employing
Aviv Menahem		Chief		Company:
		Accountant
Address:7 Jabotinsky Street, Ramat Gan, Tel:		Fax:		E-mail:
52520	03-7559321	03-7559148	[e-mail]

Regulation 37(a)(1)

Below are the directors' decisions in accordance with Regulation 37(a)(1) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970:

• The proposed dividend distribution does not have a material impact on the bank's financial situation. See below for details of the revenue balance.
• The balance of the corporation's revenues as defined in Section 302 of the Companies Law, prior to the proposed distribution, amounts to a total of ILS 13,762 million.
• The balance of the corporation's revenues as defined in Section 302 of the Companies Law, after the proposed distribution, amounts to a total of ILS 13,370 million.
• The impact of the proposed distribution on the equity structure was examined and it was found that the results of the bank's activity in the year following the dividend distribution shall be such that the capital adequacy ratio and the leverage ratios shall be no less than required.

Furthermore and in addition to the aforesaid:

• There is no concern that the dividend distribution might prevent the bank from complying with its current and expected commitments.
• The proposed distribution is out of the revenues, as defined in the Companies Law.
• The bank complies with additional regulatory limitations set by the Supervision of Banks, including the provisions of the Proper Conduct of Banking Directive no. 331 regarding "dividend distribution by banking corporations", as well as capital adequacy limitations, leverage limitations and other limitations.

In view of the aforesaid, it is evident to the board of directors that there is no impediment to distribute a dividend in the sum of ILS 392.0 million, which constitute 40% of the net profit for the first half of 2019, and it has resolved to approve the aforesaid distribution, inter aliadue to the bank's lack of dividend distribution since the second quarter of 2018 and onwards; and in light of the results of the bank's activities during the first half of 2019.

The dividend distribution, as described above in this report, is with the consent of the Supervisor of Banks.

It is hereby clarified that the dividend distribution described above in this report is not to change the bank's updated dividend policy (as published on February 27th, 2018, reference no. 2018-01-015753).