Mizrahi Tefahot Bank : Presentation-Financial statements December 31,2023

Q4/23

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 2023 quarterly and annual reports and/ or immediate reports, as well as the periodic, quarterly and annual reports and/or immediate reports published by the bank in previous years.

• 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, annual or immediate reports published by the bank. In order to receive the full picture regarding the bank's 2023 quarterly and annual 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 or otherwise) 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, which may 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.

1

Q4/23

Macro environment

Unemployment rate)1(

GDP growth (2)

6.0%	Bank of Israel interest rate and inflation	Known CPI - monthly change
5.0%
	1 year OTC inflation	4.50%
4.0%
expectation 2.61% )4(
3.0%
2.0%
1.0%
0.0%		0.0%

-1.0%

Aug-17

Oct-17

Dec-17

Feb-18

Apr-18

Jun-18

Aug-18

Oct-18

Dec-18

Feb-19

Apr-19

Jun-19

Aug-19

Oct-19

Dec-19

Feb-20

Apr-20

Jun-20

Aug-20

Oct-20

Dec-20

Feb-21

Apr-21

Jun-21

Aug-21

Oct-21

Dec-21

Feb-22

Apr-22

Jun-22

Aug-22

Oct-22

Dec-22

Feb-23

Apr-23

Jun-23

Aug-23

Oct-23

Dec-23

Feb-24

(1) Broad Unemployment Rate (general definition of unemployed, unemployed that ceased working due to dismissal or closing of their work place in the last two years and temporary	2
absent from their work for the whole week due to economic reasons) (15 years old and above). (2) Bank of Israel forecast for 2024 - 2025 - annual average according to Bank of Israel
research department forecast from January 1, 2024. (3) Broad Unemployment rate, ages 25-64. (4) As of March 7, 2024.

Q4/23

Overview of Mizrahi-Tefahot

Leading Israeli Bank

NIS 448bn

Total Assets1

NIS 12.0bn

Net Interest Revenue2

NIS 36.1bn

Market Cap3

NIS 325bn

Net Loans to the public1

NIS 14.8bn

Total Revenue2

>7,100

Employees1

NIS 359bn

Deposits from the public1

NIS 4.9bn

Net Profit2

206

Branches1

Significant Market Shares4

Mizrahi-Tefahot

Other

36.1%

32.4%

21.3%

18.1%

18.4%

#1

#1

Mortgages

Retail Segment

5

Loans

Assets

Deposits

(1) As of December 31, 2023. (2) For 1-12/2023. (3) Tel Aviv Stock Exchange (as of March 6, 2024)

3

(4) As of September 30, 2023. (5) Market share in credit to Households and Private Banking segments (supervisory operating segments).

Q4/23 Financial Highlights

	Total Assets (NISbn)	Net Loans to the Public (NISbn)
	4.6%	448		5.8%	325
Balance Sheet	307
428
Growth
	Dec-22	Dec-23	Dec-22		Dec-23

Deposits from the Public (NISbn)

345 4.1% 359

Dec-22Dec-23

Profitability

	Cost/Income Ratio
45.2%	46.4%1	37.7%
2022	2022	2023

Return on Equity

20.1%	19.0%1	19.1%
2022	2022	2023

NPL Ratio2

Loan-Deposit Ratio

CET1 Ratio 10.32%

Asset Quality,

Liquidity and

Capitalisation

0.8%1.1%

89.2%

90.7%

9.94%

Dec-22Dec-23

Dec-22Dec-23

Dec-22

Dec-23

(1) Excluding effect of capital gain, net from sale of assets.	4
(2) NPL Ratio is calculated as Impaired Credit not Accruing Interest Income, divided by Gross Loans to the Public.

Q4/23

The effect of Iron Swords war events

• On October 7, 2023, the Iron Swords war was declared following a sudden murderous rampage into settlements close to the Gaza Strip border. This was concurrently with the start of military escalation on the Northern border.
• The Bank is prepared to continue its operations and to provide service to its customers, including in war-affected zones, in as much as possible.
• The Bank takes part in the national endeavor and has announced the allocation of funds for charitable donations and assistance to civilians affected by the war, and has launched programs to provide relief to Bank customers, with emphasis on customers resident in war-affected regions.
• • Total charitable donations allocated by the Bank for adoption of the town of Sderot and kibutz Kfar Aza and other activities to benefit residents of the Gaza border and Northern border areas is estimated at NIS 70 million.
  • The estimated value of relief and banking benefits extended to all Bank Group customers, beyond the charitable donation amount is NIS 531 million (including banking relief and benefits provided to residents of Sderot and Kfar Aza, as noted above), assuming full utilization of all benefits offered to the relevant population.

5

(NIS mil)

Q4/23

Loan balance with changes to terms and conditions of debt due to the war

Loan balance with	Loan balance with		Loan balance with	Loan balance with
	changes to terms and	changes to terms and
changes to terms and	changes to terms and	Total credit to(1) conditions of debt as of	conditions of debt as of
conditions of debt as of	conditions of debt as of	this segment	31.12.2023	29.2.2024
31.12.2023	29.2.2024
	to total credit (1)	to total credit (1)

Large businesses
144	42	47,983	0.3%	0.1%
Medium businesses	219	121	12,171	1.8%	1.0%
Small businesses	3,612	1,892	34,947	10.3%	5.4%
Private individuals	855	439	27,752	3.1%	1.6%
Housing loans	23,714	18,184	206,562	11.5%	8.8%
Total
	28,544	20,678	329,415	8.7%	6.3%

6

(1) Total credit as of 31.12.2023, before provisions.

Q4/23 Asset quality (NIS mil)

Segment	1-12/2023	1-12/2022	Q4/2023	Q4/2022
	Provision	Rate of	Provision	Rate of	Provision	Rate of	Provision	Rate of
	provision	provision	provision	provision
Housing loans	247	0.12%	99	0.05%	12	0.02%	11	0.02%
Business	892	0.96%	336	0.40%	221	0.95%	136	0.64%
Households	324	1.21%	97	0.36%	62	0.92%	44	0.65%
Total	1,463	0.45%	532	0.17%	295	0.36%	191	0.25%

Expenses with respect to credit losses in 2023 amounted to NIS 1,463 million, of which NIS 1,011 millions (0.31% of total loans to the public) are group expenses for credit losses, and NIS 452 million (0.14% of total loans to the public) are individual expense for credit losses.

The increase in provisions in 2023, and in particular in the third quarter of this year, is mostly due to group- based provision for credit losses, recognized so as to reflect the increase in credit risk in the market due to the war, though no material indicators of increase in this risk have been seen to date at the Bank. The increase in provision over the year was also due to growth in Bank's loan portfolio and to higher risk in the market, primarily due to the higher interest rates

Provisions / loans to

the public

	0.45%
0.17%
2022	2023

7

Q4/23 Profitability and efficiency

Net profit (NIS mil)

Return on equity

	4,910	20.1%
4,472		19.1%
	19.0%)1(
279
4,193 )1(
4,472
2022	2023	2022	2023

1. Excluding effect of capital gain, net from sale of assets.

Cost/income ratio

46.4% )1(

45.2%

37.7%

)1(

20222023

8

Q4/23

Continuous loan growth (NIS bil)

Credit to the public(1)

325.3

307.5

								271.4				Business segment	31.12.23	31.12.22	% change in
					245.5
			194.4	204.7								Housing loans	205.4	195.8	4.9
159.2	171.3	181.1	220.8					Households + private	26.9	27.2	)1.3(
										banking
												Total individuals	232.3	223.0	4.2
												Total businesses(2)	93.0	84.4	10.2
												Total	325.3	307.5	5.8
2015	2016	2017	2018	2019	2020	2021	2022	2023
(1) Net											Supervisory operating segments
										(2) Small and micro businesses, Medium businesses and Large businesses, Institutional	investors and
											Overseas operations			9