Bank Leumi Le-Israel B.M. · TASE:LUMI
Bank Leumi Le-Israel B.M — Q1 2011 Earnings Presentation
21 slides from Bank Leumi Le-Israel B.M's earnings presentation, 2011
Slide 1: Leumi Group First Quarter 2011 Financial Results Discussion
LeumiGroup First Quarter 2011 Financial Results Discussion
Slide 2: Disclaimer
This document has been prepared by Bank Leumi le-Israel B.M. (the “Bank”) and is provided to you solely for your information and is not to be copied or distributed to any other person. This document does not purport to be all-inclusive or to contain all the information that may be relevant in making
Slide 3: The Israeli Economy: Withstanding adverse global financial factors
The Israeli Economy: Withstanding adverse global financial factors Main Macroeconomic Variables 2009 2010 2011* Annual Rates of Change, Real Terms GDP 0.8% 4.7% 4.7% Strong GDP growth, fueled by Gross product of the business sector 0.1% 5.4% 5.3% private consumption Private consumption 1.7% 5.0% 3.9
Slide 4: Sustainable growth while strengthening capital
Sustainable growth while strengthening capital NIS millions Net Profit and ROE 12.1% 11.2% 10.7% 10.4% 9.0% 660 603 596 577 519 0 0.0% Q1'10 Q2'10 Q3'10 Q4'10 Q1'11* Net Operating Profit and ROE 16.0% 14.0% 11.2% 10.7% 10.4% 12.0% 8.7% 9.1% 10.0% 8.0% 592 603 576 478 522 6.0% 4.0% 2.0% 0 0.0% Q1'10
Slide 5: Financial performance P&L Highlights
Financial performance NIS millions P&L Highlights Q1’ 11 Q1’ 10 Δ Δ% Net interest income before expenses for 1,939 1,807 132 7.3 credit losses* Operating and other income 1,023 999 24 2.4 Total Income 2,962 2,806 156 5.6 Expenses in respect of credit losses* (102) 130 (232) - Operating and other exp
Slide 6: Net interest income remains impacted by low interest rate environment
Net interest income remains impacted by low interest rate environment 3800 NIS millions Reported Average 1,874 Corrected Average 1,678 4.80% 4.50% 2.58% 4.20% 3300 2.36% 2.32% 3.90% 2.46% 3.60% 1.99% 3.30% 3.00% 2800 2.70% 2.40% 2.10% 1.80% 1.27% 1.22% 1.26% 2300 1.01% 1.12% 1.50% 1.20% 0.90% 2,141
Slide 7: Expenses for credit losses (Provision for doubtful debts)
Expenses for credit losses (Provision for doubtful debts) NIS millions 2010 Average 0.26% 0.37% 0.38% 212 0.25% 196 130 0.09% 46 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 -102 -0.18% Q1 ’10 Q2’10 Q3’10 Q4’10 Q1’11 Individual expenses 159 244 63 248 (61) Group expenses (29) (48) (17) (36) (41) (additional in 201
Slide 8: Problematic Debts
Problematic Debts 31.03.11 31.12.10 A. Problematic Debts Impaired 5,439 6,034 Substandard 784 869 Special mention 3,598 3,640 Total balance sheet credit 9,821 10,543 Off-balance sheet credit risk 1,056 1,610 Bonds of problematic borrowers 627 942 Other assets in respect of derivative instruments of
Slide 9: Indices of credit risk according to the new directives
Indices of credit risk according to the new directives In percentage 31 31 March December 2011 2010 Balance of impaired credit to the public not accruing interest income as a percentage of the balance of credit to 3.4 3.9 the public Balance of credit to the public which is not impaired in arrears of
Slide 10: Total operating and other income: YoY mainly impacted by capital market activities
Total operating and other income: YoY mainly impacted by capital market activities NIS millions 1,090 1,039 1,023 999 983 85 22 18 21 28 30 100 57 74 14 8% increase in income from commissions • Credit handling 977 975 904 917 912 •Securities transactions •Credit Cards Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 O
Slide 11: Operating commissions constitute 95% of total operating income
Operating commissions constitute 95% of total operating income NIS millions 72% 291 271 203 203 204 195 122 81 82 83 73 71 Securities Account Credit Cards Credit Handling Conversion Other Fees Transactions* Management differences Q1'11 Q1'10 *Includes financial product distribution commissions 11
Slide 12: 3.9% YoY increase in total operating and other expenses
3.9% YoY increase in total operating and other expenses (after neutralizing special salary expenses) NIS millions 2,263 1,984 2,054 Salaries and related 1,833 1,810 663 327 expenses constitute 64 354 317 percent of total expenses 350 408 391 419 380 16.1% increase in salary 401 expenses is reduced t
Slide 13: Cost/Income ratio
Cost/Income ratio 76.3% 68.3% 65.6% 58.4% 59.9% 2006 2007 2008 2009 2010 74.1% 70.0% 69.3%* 66.1% 64.4% 65.3% 64.0% 55.8% 54.7% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 *63.2% after neutralizing special salary expenses 13
Slide 14: Building on diversification & core banking activities
Building on diversification & core banking activities NIS millions Contribution Net operating profit Q1 2011 Q1 2010 Δ% to profit % Households 111 32 + 19.3 Small businesses 97 72 34.7 16.8 Corporate banking 339 230 47.4 58.9 Commercial banking 154 112 37.5 26.7 Private banking 50 30 66.7 8.7 Financ
Slide 15: Sustained balance and off-balance sheet growth
Sustained balance and off-balance sheet growth NIS billions Total assets 8.7% 4.3% 328.1 328.5 Deposits 321.8 250.4 249.6 248.3 310.8 244.8 302.2 238.0 2007 2008 2009 2010 Q1 2011 2007 2008 2009 2010 Q1 2011 Credit 13.3% Off-balance sheet 25.3% 224 225.1 560.4 578.5 213.2 461.8 460.2 204.7 340.4 198
Slide 16: Diversified credit portfolio with focus on higher RoE segments
Diversified credit portfolio with focus on higher RoE segments Growth of loan portfolio by segment Composition of loan portfolio by segment 2005-Q1’11 Q1’11, NIS billions, % CAGR Households 9% 53, 23% 19, 9% Small businesses 8, 3% 25, 11% 9% 73, 33% 46, 21% Private banking 10% 1, 0% Commercial banki
Slide 17: An increase in the value of bonds
An increase in the value of bonds Other Comprehensive Income* 637 573 468 388 309 252 228 -70 -1,078 31.03.09 30.06.09 30.09.09 31.12.09 31.03.10 30.06.10 30.09.10 31.12.10 31.03.11 * Net balances in shareholders’ equity (net adjustments in respect of available-for-sale securities) 17
Slide 18: Low risk: 60% of nostro investments are with governments and central banks
Low risk: 60% of nostro investments are with governments and central banks 31 March 2011, NIS billions, % NIS 47.1 billion securities portfolio NIS 36.8 billion deposits NIS 83.9 billion nostro portfolio by asset class with banks by counterparty 53% Governments 70% Central Banks & Cash 60% Govt’s &
Slide 19: Sound capital structure: Well-positioned for growth and evolving regulatory environment
Sound capital structure: Well-positioned for growth and evolving regulatory environment 15.10 Capital to risk weighted assets, % 14.09 14.10 11.52 11.58 Total 8.57 8.33 8.25 Core 7.55 7.51 Tier I 23.7 Capital development 22.9 NIS billions 21.9 19.5 18.7 2007 2008 2009 2010 Q1 2011 From 2009 as per B
Slide 20: High quality balance sheet
High quality balance sheet • Credit / Deposits : 91% Strong financial ratios • Credit / Total Assets: 69% • Deposits / Total Assets: 76% • Impaired credit not accruing income / Total credit: 3.4% High credit quality • Balance of the allowance for credit losses / Balance of credit not accruing income
Slide 21: Thank You Investor Relations Contacts
Thank You Investor Relations Contacts Phone: +972 (0)3 514 8630 +972 (0)3 514 8954 Email herb.small@bankleumi.co.il rachel.livnatseri@bankleumi.co.il Wherever you wish to go, Leumi is with you 21
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