Mizrahi Tefahot Bank Ltd · TASE:MZTF
Mizrahi Tefahot Bank — FY2018 Earnings Presentation
38 slides from Mizrahi Tefahot Bank's earnings presentation, December 2018
Slide 1: Financial Statements December 2018
Financial Statements December 2018
Slide 2: Disclaimer
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 annual and/or quarterly reports and/ or immediate reports, as well as the periodic, qu
Slide 3: Looking ahead
Looking ahead Now that the US Department of Justice’s investigation is concluded, the Bank can focus on achieving the goals of the strategic plan and resume, during 2019, to act in accordance with the dividend policy 3
Slide 4: The strategy is working
The strategy is working 4
Slide 5: Net profit
Net profit (NIS mil) 1,647* 1,266 1,347 1,134 1,206 1,092 2014 2015 2016 2017 2018 *Excluding the provisions for the US Department of Justice's investigation, and taking into account provisions for bonuses in line with the level of profitability from current operations, and the tax expenses derived
Slide 6: Net profit - ROE
Net profit - ROE (NIS mil) ROE target for 2021 according to the strategic plan 11.6% 10.2% 8.5% 11.5% 2017 2018 Excluding impact of provisions for the US DoJ investigation 6
Slide 7: Cost/income ratio
Cost/income ratio Cost/income ratio target for 2021 63.6% according to the strategic plan 60.2% 57.2% Lower than 55% 2017 2018 Excluding impact of provisions for the US DoJ investigation 7
Slide 8: Acceleration of growth in total income – in line with strategic plan
Acceleration of growth in total income – in line with strategic plan (NIS mil) Average annual growth rate – 8.5% 6,889 Income growth target according to the strategic plan 6,000 14.8% 5,640 5,392 6.4% 8% 4.6% 2015 2016 2017 2018 8
Slide 9: Financing revenues from current operations continue to grow
Financing revenues from current operations continue to grow (NIS mil) Average annual growth rate – 12.1% 1,324 1,253 1,221 1,141 1,124 1,095 1,047 1,067 1,018 946 990 922 909 854 898 849 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 9
Slide 10: Double digit growth in financing revenues in all business segments
Double digit growth in financing revenues in all business segments Financing revenues (NIS m) 2018 2017 % of change Housing loans 1,517 1,311 15.7% Households and private banking 1,349 1,202 12.2% Small and micro businesses 1,005 895 12.3% Medium businesses 244 206 18.4% Large businesses and institu
Slide 11: Increase of all business segments – one of the main targets of the strategic plan
Increase of all business segments – one of the main targets of the strategic plan 11
Slide 12: Continuous growth in credit to small and micro businesses
Continuous growth in credit to small and micro businesses (NIS mil) 18,977 16,717 13.5% 15,122 13,909 10.5% 8.7% 2015 2016 2017 2018 12
Slide 13: Continuous growth in credit to medium businesses
Continuous growth in credit to medium businesses (NIS mil) 13.9% 6,585 20.8% 5,779 4,786 4,785 2015 2016 2017 2018 13
Slide 14: Substantial growth in credit to large businesses
Substantial growth in credit to large businesses (NIS mil) 9.8% 17,567 3.5% 2% 15,999 15,456 15,156 2015 2016 2017 2018 14
Slide 15: Increased business focus is reflected in the credit composition
Increased business focus is reflected in the credit composition 21.8% 22.8% 21.2% 11.1% 11.2% 11.1% 67.7% 67.0% 66.1% 31.12.16 31.12.17 31.12.18 Housing loans Consumer credit Business credit 15
Slide 16: UMTB is a competition catalyst increasing its market share
UMTB is a competition catalyst increasing its market share in accordance with the strategic plan 16
Slide 17: Increasing equity base
Increasing equity base (NIS mil) Average annual growth rate – 9% 14,681 13,685 12,714 11,847 10,797 9,681 8,730 2012 2013 2014 2015 2016 2017 2018 17
Slide 18: Continuous loan growth
Continuous loan growth Credit to the public (NIS mil) Average annual growth rate – 7.1% 194,381 181,118 171,341 159,204 147,569 138,565 128,651 2012 2013 2014 2015 2016 2017 2018 18
Slide 19: Credit growth in all segments: retail and business
Credit growth in all segments: retail and business (NIS mil) 31.12.2018 31.12.2017 % of change Housing loans 126,105 119,559 5.5% Households and Private banking 21,030 19,941 5.5% Small and micro businesses 18,977 16,717 13.5% Medium businesses 6,585 5,779 13.9% Large businesses and Institutional in
Slide 20: Significant growth in the business segments
Significant growth in the business segments (NIS mil) 31.12.2018 31.12.2017 % of change Housing loans 126,105 119,559 5.5% Households and Private banking 21,030 19,941 5.5% Small and micro businesses 18,977 16,717 13.5% Annual growth of 47,246 41,618 Medium businesses 6,585 5,779 13.9% 13.5% in Larg
Slide 21: Continue to lead the mortgage market while maintaining adequate profitability
Continue to lead the mortgage market while maintaining adequate profitability 1314 1128 943 837 735 35.4% 35.4% 35.2% 34.2% 33.7% 2014 2015 2016 2017 2018 Total market share Interest revenues 21
Slide 22: Continuous deposit growth
Continuous deposit growth Deposits from the public (NIS mil) Average annual growth rate 7.7% 199,492 183,573 178,252 162,380 152,379 141,244 128,081 2012 2013 2014 2015 2016 2017 2018 22
Slide 23: UMTB continue to increase its market share
UMTB continue to increase its market share Credit to the public* Deposits from the public (excluding institutional investors)* 19.1% 15.5% 18.9% 18.6% 14.7% 14.8% 17.7% 13.9% 31.12.2015 31.12.2016 31.12.2017 31.12.2018 31.12.2015 31.12.2016 31.12.2017 31.12.2018 *UMTB’s market share out of five majo
Slide 24: Expansion of branch network while maintaining moderate increase in positions
Expansion of branch network while maintaining moderate increase in number of positions Number of branches* Number of positions** 9.0% -12.3% -12.5% 214 9,627 205 9,111 8,857 195 188 177 184 187 193 5.0% 8,615 6,047 6,141 6,271 6,355 UMTB Average of other four major UMTB Average of other four major b
Slide 25: Significant improvement in Bank Yahav's business results
Significant improvement in Bank Yahav’s business results after successful implementation of new IT system * 2015 results exclude extraordinary profit from capital market activity, the non-adjusted ROE is 11.3%, and cost/income ratio of 68.1% 25
Slide 26: Financial results
Financial results 26
Slide 27: Net profit
Net profit (NIS mil) 1,647 * 1,347 1,266 1,206 2016 2017 2018 *Excluding the provisions for the US Department of Justice's investigation, and taking into account provisions for bonuses in line with the level of profitability from current operations, and the tax expenses derived from these 27
Slide 28: Equity
Equity (NIS mil) 14,681 13,685 2017 2018 28
Slide 29: Net profit - ROE
Net profit - ROE (NIS mil) 11.6%* 10.2% 8.5% 2017 2018 *Excluding the provisions for the US Department of Justice's investigation, and taking into account provisions for bonuses in line with the level of profitability from current operations, and the tax expenses derived from these 29
Slide 30: Net profit - ROE
Net profit - ROE (NIS mil) 14.1% * 13.4% 12.7% 10.4% 11.2% 10.3% * 10.7% 8.0% 6.1% 5.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 *Excluding the provisions for the US Department of Justice's investigation, and taking into account provisions for bonuses in line with the level of profitability from current op
Slide 31: Condensed P&L report
Condensed P&L report 2018 2017 % of change Interest revenue, net 4,922 4,347 13.2 Non interest revenues 1,967 1,653 19.0 Total 6,889 6,000 14.8 Expenses with respect to credit losses 310 192 61.5 Operating and other expenses 4,384 3,611 21.4 Net profit 1,206 1,347 )10.5( 31
Slide 32: Total revenues
Total revenues (NIS mil) 6,889 6,000 5,640 2016 2017 2018 * Including interest revenues net, and non interest revenues 32
Slide 33: Financing revenues
Financing revenues (NIS mil) Rate of 2018 2017 change Interest revenues, net 4,922 4,347 Non-interest financing revenues 445 136 Total financing revenues 5,367 4,483 19.7 Less: Linkage differentials with respect to CPI position 182 32 Revenues from collection of interest on troubled debt 41 43 Gain
Slide 34: Provisions / loans to the public
Provisions / loans to the public 0.16% 0.12% 0.11% 2016 2017 2018 34
Slide 35: Operating and other expenses
Operating and other expenses 2018 2017 % of change Salaries 2,407 2,271 6.0 Building and equipment maintenance and depreciation 747 742 0.7 Others 1,230 598 - Total 4,384 3,611 21.4 35
Slide 36: Main balance sheet items development
Main balance sheet items development 31.12.2018 31.12.2017 % of change Total balance sheet 257,873 239,572 7.6 Loans to the public, net 194,381 181,118 7.3 Deposits from the public 199,492 183,573 8.7 Securities 11,081 10,133 9.4 Equity 14,681 13,685 7.3 36
Slide 37: Capital adequacy
Capital adequacy 13.94% 13.64% Total Ratio Tier 1 10.20% 10.01% 31.12.2017 31.12.2018 37
Slide 38: Thank You
Thank You