JERUSALEM, Aug 17 (Reuters) - First International Bank of
Israel (FIBI) beat second-quarter expectations on
Tuesday, reporting a 132% jump in profit on rising revenue and a
reversal of COVID-19 loan loss provisions.
Following on the heels of most of its domestic peers,
Israel's fifth-largest bank by assets also said it would
distribute a special dividend.
Net profit totalled 390 million shekels in
April-June, FIBI said, up from 168 million shekels a year
earlier and well above a Reuters poll forecast for 331 million
After setting aside 165 million shekels for bad loan
provisions in the second quarter of last year, the bank said it
reversed 128 million shekels of that as income in April-June
this year. This followed a trend in the local banking industry
after a successful vaccination campaign enabled Israel to begin
to emerge from lockdowns and the economy picked up.
Net interest income rose to 710 million shekels from 660
million shekels, the bank said.
FIBI, like other banks in Israel, allowed customers to defer
loans due to the COVID-19 pandemic. The ratio of deferred debts
to total loans at the end of June amounted to 0.2%, versus 1.9%
at the end of 2020. Loans to customers grew 6.6% over the past
The bank noted that while COVID-19 infections in Israel have
started to spike, it was "well prepared for the various
scenarios monitoring the different risks" and was following
guidelines from Israel's banking regulator and health officials.
"The bank is taking measures to ensure business continuity,"
The bank's Tier 1 capital ratio rose to 11.67% from 10.71% a
FIBI said it would pay a 225 million shekel dividend,
representing 30% of 2020 net profit. Larger rivals Hapoalim
, Leumi and Mizrahi-Tefahot have
also announced special dividends.
Israel's banking regulator had banned regular dividends in
March 2020 through this September, but allowed one-off payouts
of up to 30% of net profit. It has not yet decided whether to
extend its dividend controls.
FIBI said its dividend distribution policy of paying up to
50% of net profit remains unchanged and would be examined in
accordance with developments and regulation.
($1 = 3.2224 shekels)
(Reporting by Steven Scheer; Editing by Susan Fenton)