Mizrahi Tefahot Bank : Analysts Presentation (pdf 1 mb)​​

Financial Statements

June 2018

Financial Statements

31 December 2008

Disclaimer

•This document has been prepared by Mizrahi-Tefahot Bank Ltd (UMTB) solely for use at the company's presentation.

The information contained in this document constitutes information from the bank's 2018 quarterly reports and/ or immediatereports, as well as the periodic, quarterly and annual reports and/or immediate reports published by the bank in previousyears.

•Accordingly, the information contained in this document is only partial, is not exhaustive and does not include the full details regarding the bank and its operations or regarding the risk factors involved in its activity and certainly does not replace the information included in the periodic, quarterly or immediate reports published by the bank. In order to receive the full picture regarding the bank's 2018 quarterly reports, the aforesaid reports should be perused fully, as published to the public.

•None of the company, or any of their employees or representatives shall have any liability whatsoever (in negligence orotherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.

•The bank's results in practice may be significantly different from those included in the forecasting information, as a result of a large number of factors, including,inter alia, changes in the domestic and global equity markets, macro-economic changes, geo-political changes, legislation and regulation changes, and other changes that are not under the bank's control, whichmay lead to the estimations not realizing and/or to changes in the business plans.

•The forecasting information may change subject to risks and uncertainty, due to being based on the management's estimations regarding future events, which include,inter alia: global and local economic development forecasts, particularly regarding the economic situation in the market, including the effect of macro-economic and geo-political conditions; expectations for changes and developments in the currency and equity markets; forecasts related to other various factors affecting exposure to financial risks; forecasts with respect to changes to borrowers' financial strength, public preferences,changes in legislation and the provisions of regulators, competitors' behavior, the status of the bank's perception,technological developments and human resources developments.

•This document does not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation of any kind regarding any security or any interest in security.

The US DOJ investigation

Forward-Looking Information-The Strategic Plan

For details regarding the bank's targets and its business strategy for the years2017-2021, see the Targets and Business Strategy chapter of the 2017 annual report of the Board of Directors and management.

On August 7th, 2018, the bank received a notice from the US Department of Justice to the bank's counsel, which includes an offer for a settlement to resolve the investigation regarding the Bank Group's business with its US customers. These financial reports include an additional provision of ILS 425 million (USD 116.5 million) due to the investigation of the US Department of Justice. The accumulated provision due to the investigation as of June 30th, 2018, is ILS 563.5 million (USD 162.6 million). For further details, see Note 10b.4 to the financial reports.

In these financial reports, the capital adequacy presented is: Tier 1 capital ratio of 9.95% and total capital ratio of 13.29% (see Note 9 tothe financial reports). The bank is acting to increase the capital ratios' safety buffers, and it estimates that the Tier1 capital ratio isexpected to exceed 10% in the third quarter of 2018.

The bank estimates that it has the ability to achieve the path of the five-year strategic plan for 2017-2021, using, per necessity, a variety of tools (which have been utilized continuously in the past) as part of its ongoing business activity.

The bank's dividend policy is that as of2018, a dividend amounting to 40% of the net profit attributed to the bank's shareholders shall be distributed due to the quarterly profits. The dividend policy is subject to the bank's compliance with the ratio of Tier1 capital to riskcomponents, as required by the Supervisor of Banks' instructions; and its maintenance of appropriate safety buffers.

In light of the aforesaid, the bank's Board of Directors has not announced the distribution of a dividend due to profits forthe second quarter of 2018.

The bank estimates that it can resume acting in accordance with the dividend policy during 2019, subject to the instructions and conditions established in the strategic plan, which include the instructions of the law and restrictions by the Supervision of Banks.

This information is forward-looking information, per its definition in the Securities Law 5728-1968. The information is based onassumptions, facts and data (hereinafter collectively: the "Assumptions") which are detailed in the strategic plan and form the groundsthereof, and might not be realized due to factors which are not solely controlled by the bank, causing the strategic plan to not be realized-including in the matter of the dividend distribution policy.

For details regarding negotiations over the renewal of the agreement with shareholders at Union Bank, see the Significant Events in theCourse of the Banking Group's Business chapter below.

Net profit(NIS mil)

815

721

550

1H2017

1H2018

1H2018

**Eהxשcluרdפinהgלpוrרoטvנ isבion

400

472

207

2Q2017

2Q2018

2Q2018

* Excluding provision

*השרפה לורטנב

* The net profit from ongoing activity of UMTB excluding the provision for the US investigation was calculated taking into account theprovisions for bonuses corresponding to the level of profitability and the derived tax expenses thereof.

ROE

1H2017

1H2018

1H2018

*השרפה לורטנב

* Excluding provision

2Q2017

2Q2018

2Q2018

*השרפה לורטנב

* Excluding provision

* The ROE from ongoing activity of UMTB excluding the provision for the US investigation was calculated taking into account the provisions forbonuses corresponding to the level of profitability and the derived tax expenses thereof.