Mizrahi Tefahot Bank Ltd · TASE:MZTF
Mizrahi Tefahot Bank — FY2008 Earnings Presentation
40 slides from Mizrahi Tefahot Bank's earnings presentation, Dec 31, 2008
Slide 1: Financial Statements 31 December 2008
Financial Statements Financial Statements 31 December 2008 31 December 2008 1
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 has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed
Slide 3: 2008 income, expenses and return on equity in view of strategic plan 2008-2013
2008 income*, expenses and return on equity in view of the strategic plan for 2008-2013** consolidated, before provision for doubtful debts, 5,800 Income (target) Above 8% CAGR 2008-2013 Expenses (target) (not linear) 4,800 9.1% 2008 (actual) h growt rate 3,733 3,800 3,202 3,330 3,018 2,688 Consolid
Slide 4: Loans to the public (NIS bil)
Loans to the public (NIS bil) 31.12.2008 31.12.2007 Increase Increase NIS bil % Households – housing loans 44.9 38.9 6.0 15.4% Households - Others 5.3 4.7 0.6 12.8% Total households 50.2 43.6 6.6 15.1% Corporate credit (including international activity) 34.0 30.7 3.3 10.7% Total loans to the public
Slide 5: Loans to the public classified by economic sector
Loans to the public classified by economic sector UMTB (incl. Yahav) Other 4 banking groups* 31.12.08 30.09.08 Others Commerce 6% Others Industry 6% 17% 8% Commerce 9% Financial Services Housholds 8% incl. mortgage 34% Construction and Industry Real estate 13% 9% Households incl. mortgages 63% Finan
Slide 6: Income by main operating segments (NIS mil.)
Income by main operating segments (NIS mil.) Income by main operating segments 2008* Retail income breakdown** Financial Total 8% 3,533 NIS mil 2008 2007 % 316 change Households 994 903 10.1 Corporate Retail 25% Mortgages 681 602 13.1 2,334 883 Small 510 450 13.3 businesses Retail segment includes H
Slide 7: Number of selling points
Number of selling points Mizrahi Tefahot Commercial selling points Will open during 2009 Mizrahi 112 branches 5 Mortgage 87 Tefahot and Adanim selling points Yahav branches and 84 1 representatives 56 Commercial selling points 11 Adanim 33 Mortgage selling points 11 9 2004 2008* * During 2009 the fo
Slide 8: Households including mortgages – credit growth
Households including mortgages – credit growth (NIS bil) average annual growth rate, excl. Yahav Credit to households incl. mortgages Credit to households excl. mortgages (balance sheet, end of period - billions) (balance sheet, end of period billions) 11.6% 12.7% 15.1% 12.8% 50.2 43.6 5.3 41.7 4.7
Slide 9: Households – income and profit from financing operations
Households – income and profit from financing operations (NIS mil) average annual growth rate Income from households incl. mortgages Profit from financing operations (NIS mil) 2007 7.1% 9.2% 11.3% 1,675 2008 1,505 629 1,442 576 1,363 24.1% 422 340 2005 2006 2007 2008 Household (excl. Mortgages mortg
Slide 10: Credit cards – income and market share
Credit cards* – income and market share Average annual growth rate income from credit cards (NIS mil) Income from credit cards – group’s market share of total banking system 10.4% 13.1% 95 84 11.5% 11.2% 74 10.5% 9.8% 64 2005 2006 2007 2008 2005 2006 2007 2008** Credit cards activity is a good proxy
Slide 11: Mortgages – group's market share
Mortgages – group’s market share Group’s market share in new housing loans Group’s market share in new housing loans 2004 - 2008 2008 44.1% 41.9% 41.9% 40.6% 38.5% 35.5% 29.2% 33.4% 32.0% Dec 2004 Dec 2008 Jan-Jul Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 08 SOURCE: Bank of Israel 11
Slide 12: Corporate credit (incl. international activity)
Corporate credit (incl. international activity)(NIS mil) Annual growth rate 10.7% 34.0 30.7 10.7% 27.7 31.12.2006 31.12.2007 31.12.2008 * Excluding Yahav 12
Slide 13: Operating expenses and labor expenses
Operating expenses and labor expenses Average annual growth rate Total operating and other Labor expenses out of total expenses expenses (NIS mil) 3.6% 3.0% 1,997 1,938 61.8% 1,873 61.5% 1,796 60.3% 59.6% 2005 2006 2007 2008 2005 2006 2007 2008 * Excluding early retirement expenses and Yahav 13
Slide 14: Cost and output per employee
Cost* and output** per employee (NIS thousand)*** Annual growth rate Cost per employee Output per employee 299 290 -4.1% 278 29,087 4.4% 27,857 27,548 2006 2007 2008 2006 2007 2008 * Salaries and related expenses divided by number of employee posts including those in subsidiaries abroad; includes a
Slide 15: Cost/income ratio
Cost/income ratio* 2004 109% 3Q-2008 77% 76% 68% 63% 71% 60%** 56% 60% 57% Mizrahi- FIBI Discount Leumi Poalim Tefahot * Cost to income ratio – Non-interest expenses divided by total pre provision income and operational income ** Excluding Yahav, as at 31.12.08 15
Slide 16: Capital adequacy ratio
Capital adequacy ratio 12.0%* 11.3% 9.2% 9% Bank of Israel requirement 2004 2005 2006 2007 2008 2009 * Target for end of 2009 16
Slide 17: Mizrahi Tefahot group 2008 main events
Mizrahi Tefahot group 2008 main events Purchase of An opportunity to improve the group’s positioning in the retail market through focus on Yahav Bank government employees, public sector and salaried employees Launching A new era in communication between the bank and the client: a combination of pers
Slide 18: Bank Yahav
Bank Yahav Purchase of control The purchase of 50% of Bank Yahav’s issued share capital was completed in July 2008 Branch network During 2008 Bank Yahav expanded its branch network by opening additional 20 branches expansion Broadening In January 2009 Bank Yahav’s license was broadened in order to a
Slide 19: Bank Yahav, Otzar Ha'hayal and Masad balance sheet comparison
Bank Yahav, Bank Otzar Ha’hayal and Bank Masad Balance sheet comparison (NIS mil) Total balance sheet assets Credit to the public* 13,639 9,050 8,491 11,823 12,256 SME3,432 SME 9,350 3,306 5,397 5,591 Retail Retail Retail Retail 3,861 5,185 5,618 2,079 3,412 1,859 SME SME 1,010 1,218 Retail Retail 8
Slide 20: Bank Yahav, Otzar Ha'hayal and Masad balance sheet comparison cont.
Bank Yahav, Bank Otzar Ha’hayal and Bank Masad Balance sheet comparison (NIS mil) cont. Deposits from the public Shareholders’ Equity 11,036 11,013 9,926 759 8,688 702 721 540 322 3,491 3,081 296 Yahav Otzar Ha'hayal Masad Yahav Otzar Ha'hayal Masad 31.12.2007 31.12.2008 20
Slide 21: Purchase to book ratio and goodwill
Bank Yahav, Bank Otzar Ha’hayal and Bank Masad Balance sheet comparison (NIS mil) cont. Purchase to book ratio Goodwill (NIS mil) 291 1.71 1.51 1.28 91 80 Yahav Otzar Masad Yahav Otzar Ha'hayal Masad Ha'hayal 21
Slide 22: Bank Yahav – Ha'kirya branch Tel Aviv
Bank Yahav – Ha’kirya branch Tel Aviv 22
Slide 23: Net operating profit
Net operating profit (1) 908 681 601 2007 2008 (1) Including profit from sale of provident funds operations 23
Slide 24: Return on equity - net operating profit
Return on equity - net operating profit (1) 17.2% 12.9% 10.4% 2007 2008 (1) Including profit from sale of provident funds operations 24
Slide 25: Profit by main operating segments
Profit by main operating segments 378 317 226 227 (1) (1) 162 112 57 51 51 39 38 23 26 -86 Household Corporate Commercial Private Small Business Financial Banking Banking Banking Management 2007 2008 (1) Excluding financial crisis effects 25
Slide 26: Profit from financing operations
Profit from financing operations % change 2008 2007 2007 Vs 2008 Ongoing activities 2,183 1,988 9.8 Losses from realization of securities and provision for (197) (90) - impairment Interest income on problem 155 171 - loans ואחרות Fair values שווי הוגן and others (177) (43 69) - Profit from Profi
Slide 27: Operating and other income analysis
Operating and other income analysis 2.4% 45 1,059 1,034 14 91 65 65 46 Operating commissions Other income Net profit from investment in securities 2007 2008 Bank Yahav 27
Slide 28: Operating commissions
Operating commissions 232 219 218 205 116 121 114 117 119 112 108 114 102 84 82 75 Paym ent Incom e from Heandling of Building & Life Collection Account Incom e from Others Services securities credit and Insurance Com m ision and Managem ent Credit Cards transactions preparation of Credit from Fees
Slide 29: Operating and other expenses analysis
Operating and other expenses analysis 3% 156 1,997 1,938 1.9% 82 1,169 1,191 5.9% 3.4% 27 47 446 421 348 360 Salaries Building & Equipment Others Total maintenance & depreciation 2007 2008 Bank Yahav 29
Slide 30: 2008 income, expenses and return on equity in view of strategic plan 2008-2013
2008 income*, expenses and return on equity in view of the strategic plan for 2008-2013** consolidated, before provision for doubtful debts, 5,800 Income (target) Above 8% CAGR 2008-2013 Expenses (target) (not linear) 4,800 9.1% 2008 (actual) h growt rate 3,733 3,800 3,202 3,330 3,018 2,688 Consolid
Slide 31: Cost/income ratio
Cost/income ratio* 60.3% 60.2% 2007 2008 Cost/Income ratio = non-interest expenses divided by total pre-provision income and operating income 31
Slide 32: Loans to the public
Loans to the public (1) 88,049 74,320 70,109 64,445 65,608 2004 2005 2006 2007 2008 (1) Including Bank Yahav NIS 3,823 mil 32
Slide 33: Loans to the public classified by economic sector
Loans to the public classified by economic sector Others 6% Industry 8% Real Estate & Construction 9% Trading 6% Financial Services 8% Individuals 63% (1) Including Bank Yahav 33
Slide 34: Loans to the public (NIS bil)
Loans to the public (NIS bil) 31.12.2008 31.12.2007 Increase Increase NIS bil % Households – housing loans 44.9 38.9 6.0 15.4% Households - Others 5.3 4.7 0.6 12.8% Total households 50.2 43.6 6.6 15.1% Corporate credit (including international activity) 34.0 30.7 3.3 10.7% Total loans to the public
Slide 35: Deposits from the public (NIS bil)
Deposits from the public (NIS bil) (1) 91,779 75,290 73,234 71,346 69,769 2004 2005 2006 2007 2008 (1) Including Bank Yahav NIS 11,013 mil 35
Slide 36: Provisions for doubtful debts (NIS mil)
Provisions for doubtful debts (NIS mil) 2008 2007 2006 Provision for Doubtful Debts 395 228 305 Provision for impairment on 215 114 - securities Total Provisions 610 342 305 36
Slide 37: Provisions/loans to the public
Provisions/loans to the public 0.45% 0.45% 0.44% 0.31% 2005 2006 2007 2008 37
Slide 38: Problem debts analysis
Problem debts analysis 2,967 1,145 1,027 1,034 934 941 967 615 616 537 187 194 Non Incom e Rescheduled Tem porary Arrears Special Supervision Housing Loans by Off Balance Sheet Bearing Extent of Arrears 31.12.2007 31.12.2008 38
Slide 39: Capital adequacy ratio
Capital adequacy ratio 31.12.2007 31.12.2008 39
Slide 40: Equity (NIS bil)
Equity (NIS bil) 5.95 5.56 5.06 4.68 4.13 3.88 31.12.2003 31.12.2004 31.12.2005 31.12.2006 31.12.2007 31.12.2008 40