Bank Leumi Le-Israel B.M. · TASE:LUMI

Bank Leumi Le-Israel B.M — Q4 2016 Earnings Presentation

20 slides from Bank Leumi Le-Israel B.M's earnings presentation, 2017

  1. Slide 1: Leumi Q4 and Full Year 2016 Results Presentation

    LEUMI Q4 AND FULL YEAR 2016 RESULTS PRESENTATION

  2. Slide 2: Disclaimer

    The conference call does not replace the need to review the latest periodic/quarterly reports in which full information is contained, including forward looking information, as defined in the Israeli Securities Law, and set out in the aforementioned reports. DISCLAIMER This document and the informati

  3. Slide 3: Maintained High Net Income and ROE

    MAINTAINED HIGH NET INCOME AND ROE 2015 2016 10.3% 9.3% Net Interest Income 7,118 7,526 2,835 2,791 Credit Loss Expenses 199 (125) Non-interest Financial Income 1,610 1,282 Commissions 4,092 3,967 Other Income 595 159 Total Operating & Other Expenses 8,836 8,580 Provision for Taxes and Profit 1,691

  4. Slide 4: Credit Growth in Main Focus Areas

    CREDIT GROWTH IN MAIN FOCUS AREAS 261 262 252 241 2013 2014 2015 2016 NIS Billions 4

  5. Slide 5: Bank's Credit Grows in Line with Strategic Focus

    BANK’S CREDIT GROWS IN LINE WITH STRATEGIC FOCUS Retail 138 139 131 120 2013 2014 2015 2016 Commercial Middle-Market Corporate 60 34 58 33 32 55 29 52 2013 2014 2015 2016 2013 2014 2015 2016 Corporate, Real-estate 5 NIS Billions

  6. Slide 6: Bank's Credit Mix Trends in Line with Strategy

    BANK’S CREDIT MIX TRENDS IN LINE WITH STRATEGY Retail 43% 47% 48% 49% 52% 57% 59% 61% 62% Corporate & Commercial 57% 53% 52% 51% 48% 43% 41% 39% 38% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Retail: Household, Small Businesses, Private Banking; Corporate & Commercial: Commercial Banking, Real Est

  7. Slide 7: Deposit Base Growing and Diverse, Liquidity Further Strengthened

    DEPOSIT BASE GROWING AND DIVERSE, LIQUIDITY FURTHER STRENGTHENED 329 347 100% 303 DEPOSITS OF THE PUBLIC 31.12.2016 84% 286 76% 262 Retail 261 252 8% 241 Commerical 17% 55% Corporate & 8% Realestate Capital Markets 12% Subsidiaries 0% 2013 2014 2015 2016 Deposits of the public Credit to the public C

  8. Slide 8: Net Interest Income Increases Year over Year

    NET INTEREST INCOME INCREASES YEAR OVER YEAR +5.7% 7,526 7,118 +8.1% 1,727 1,867 2015 2016 Q42015 Q42016 NIS millions 8

  9. Slide 9: Bank's Net Interest Income Grows in Line with the Strategic Focus

    BANK’S NET INTEREST INCOME GROWS IN LINE WITH THE STRATEGIC FOCUS Retail NII 3,482 8.0% 3,761 878 10.6% 971 2015 2016 Q4 2015 Q4 2016 Commercial Middle-Market NII Corporate NII 1,109 (5.6%) 1,047 8.8% 895 822 219 4.1% 228 277 (5%) 263 2015 2016 Q4 2015 Q4 2016 2015 2016 Q4 2015 Q4 2016 Corporate, Re

  10. Slide 10: High Quality Credit Portfolio in a Nutshell

    HIGH QUALITY CREDIT PORTFOLIO IN A NUTSHELL NPL Ratio 1.2% Positive Trend Line of Problem Debts 2.8% 10,931 9,801 9,551 2.1% 7,928 7,628 55% 39% 46% 1.7% 40% 40% 1.3% 19% 28% 1.2% 16% 18% 15% 29% 35% 33% 42% 45% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Special Mention Subordinated Impaired

  11. Slide 11: Another View of the High Quality Credit Portfolio

    ANOTHER VIEW OF THE HIGH QUALITY CREDIT PORTFOLIO LOW CREDIT LOSS EXPENSES 0.19% NO SINGLE 10% 472 CREDITORS GROUP 0.11% 268 0.08% 199 2013 2014 2015 2016 -125 (0.05%) 11 NIS Millions

  12. Slide 12: Diverse and Stable Commission Revenue

    DIVERSE AND STABLE COMMISSION REVENUE Other Fees Other Fees Credit Card Credit Card Conversion Conversion Differences Differences 9% 9% 8% 23% 8% 26% Credit Credit Holdings Holdings 5% 5% 2015 2016 Financing 13% 4.1 13% 4.0 Financing Transactions Transactions 23% 21% 19% Securities 18% Account Trans

  13. Slide 13: Operating & Other Expenses Reduced

    OPERATING & OTHER EXPENSES REDUCED (3%) 8,836 8,580 5,544 2015 2016 5,422 (5.3%) CORE SALARY EXPENSES 5,629 5,329 ONE-TIME BONUS & EFFECT OF Total Salary & COLLECTIVE WAGE AGREEMENTS (85) 93 Related Expenses (2.2%) TOTAL SALARY & RELATED EXPENSES 5,544 5,422 Maintenance & 1,683 1,697 Depreciation Ex

  14. Slide 14: Continuous Streamlining of the Business

    CONTINOUS STREAMLINING OF THE BUSINESS NUMBER OF EMPLOYEES 13,809 13,401 13,079 12,693 NUMBER OF EMPLOYEES REDUCED BY >1,000 YoY AND ~2,200 IN PAST 4 YEARS 11,636 NATURAL RETIERMENT OF 630 DUE OVER NEXT 5 YEARS NATURAL RETIREMENT OF 1,700 DUE OVER NEXT 10 YEARS 2012 2013 2014 2015 2016 14

  15. Slide 15: Set for Growth, Successfully Managing Capital

    SET FOR GROWTH, SUCCESFULLY MANAGING CAPITAL SUCCESFULLY MANAGING CAPITAL REGULATORY CET-1 TARGET 11.15% Tier 1 Capital ratio 10.3% 1.1.2017 9.58% 9.09% 31.3 LEUMI’S CET-1 TARGET 28.8 10.5% 31.12.2017 25.8 TOTAL CAPITAL RATIO 13.8% 1.1.2017 REGULATORY TARGET 15.21% 31.12.2016 LEUMI ACTUAL 31.12.2014

  16. Slide 16: New Dividend Policy Announced

    NEW DIVIDEND POLICY ANNOUNCED PAYOUT TO RESUME BASED ON QUARTELY PAYOUT POLICY Q1 2017 RESULTS 20% PAYOUT REFLECTS A 2.3% ANNUAL YIELD 16

  17. Slide 17: 2016 Highlights – Bearing the Fruit

    2016 HIGHLIGHTS – BEARING THE FRUIT IMPROVED CAPITAL ADEQUACY RATIO – NEW DIVIDEND POLICY ONLY ISRAELI BANK TO HAVE FULLY RESOLVED U.S. ISSUE CONTINUED DEMONSTRATION OF HIGH ROE STRONG CREDIT PORTFOLIO DEMONSTRATING ONGOING HIGH QUALITY CONTINOUS IMPLEMENTATION OF EFFICIENCY PLAN OPERATING EXPENSES

  18. Slide 18: Thank You

    THANK YOU

  19. Slide 19: Appendix

    APPENDIX

  20. Slide 20: Strong Macro Profile – A Positive for Leumi

    STRONG MACRO PROFILE – A POSITIVE FOR LEUMI 2015 2016 E2017* Strong Economic Growth – Positive for Leumi GDP, rate of change, real terms 2.5% 4.0% 3.4% Current account surplus, % of GDP 4.6% 3.9% 2.5% Robust Demographic Fundamentals – Another “Plus” for Leumi Government budget deficit, % of GDP (2.1

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