Mizrahi Tefahot Bank Ltd · TASE:MZTF
Mizrahi Tefahot Bank — H1 2020 Earnings Presentation
31 slides from Mizrahi Tefahot Bank's earnings presentation, August 2020
Slide 1: Financial statements June 30, 2020
Financial statements June 30, 2020 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 constitutes information from the bank's 2020 quarterly reports and/ or immediate reports, as well as the periodic, quarterly and an
Slide 3: Continuous growth in UMTB's core activities
Continuous growth in UMTB’s core activities Continuous Significant growth Notable execution growth in credit in deposit of credit in gathering government guaranteed funds Increase in Controlling operating commissions expenses, with emphasis on salaries 3
Slide 4: Working under Corona virus crisis
Working under Corona virus crisis Extensive Response to operational customers in preparation which light of social Leveraging enabled distancing business appropriate service limitations and opportunities to bank customers the economic situation • Splitting of units • Deferral of monthly repayments •
Slide 5: Net profit
Net profit (NIS mil) 980 717 (1) 663 576 360 1H/2019 1H/2020 2Q/2019 2Q/2020 (1) Excluding revenues amounting NIS 82 million (net of taxes NIS 54 million) with respect to agreement with insurers to conclude derivative proceedings, 5 recorded in 1Q/2020.
Slide 6: Return on equity
Return on equity ROE 2021 target according to the strategic plan 15.8% 13.3% 11.5% 9.0% 9.0% 8.3% )1( 1H/2019 1H/2020 2Q/2019 2Q/2020 (1) Excluding revenues amounting NIS 82 million (net of taxes NIS 54 million) with respect to agreement with insurers to conclude derivative proceedings, 6 recorded i
Slide 7: Efficiency ratio
Efficiency ratio Cost/income ratio 2021 target according to the strategic plan 55% 53.6% 53.8% )1( 52.8% 49.9% 52.6% 1H/2019 1H/2020 2Q/2019 2Q/2020 (1) Excluding revenues amounting NIS 82 million (net of taxes NIS 54 million) with respect to agreement with insurers to conclude derivative proceeding
Slide 8: Expenses
Expenses (NIS mil) Annual growth target according to the strategic plan – 6% Salaries Operating and other expenses -3.4% -1.5% 1,997 1,284 1,967 1,240 1H/19 1H/20 1H/19 1H/20 8
Slide 9: Continuous loan growth
Continuous loan growth (NIS mil) 214,450 204,708 194,381 181,118 171,341 159,204 147,569 138,565 2013 2014 2015 2016 2017 2018 2019 Q12020 H1/2020 9 (1) In annual terms
Slide 10: Continuous loan growth led by business and mortgages
Continuous loan growth led by business and mortgages (NIS mil) Business segment 30.06.20 31.12.19 30.06.19 % of change % of change 30.6.2020- 30.6.2020- )1( 31.12.2019 30.6.2019 Housing loans 139,605 134,637 130,140 7.5% 7.3% Households and Private banking 20,893 21,856 21,165 -8.6% -1.3% Small and
Slide 11: Government guaranteed special Corona program – Bank's share higher than its market share
Government guaranteed special Corona program – Bank’s share higher than its market share Market share of the Bank in Credit to small businesses ~ 20% Government guaranteed Corona 11.1% program for small and medium businesses: NIS 3.2 bil (as of August 10, 2020) State guaranteed Financial reports 11
Slide 12: Mortgages - maintaining leading position
Mortgages - maintaining leading position Continuous growth of balance and revenues Total balance (average)(NIS bil) Total interest revenue (NIS mil) 133 128 119 400 115 384 109 348 96 307 249 216 12 * Operating segments in conformity with management approach. Note 12 to quarterly reports, note 29 to
Slide 13: Adjusting provisions to market conditions
Adjusting provisions to market conditions (NIS mil) Applying methodology for possible future impact of the Corona virus on economic conditions and regulatory guidance Segment H1/2020 H1/2019 2019 Provision Rate of Provision Rate of Provision Rate of provision provision provision Housing loans 118 0.
Slide 14: Robust, resilient balance sheet, tilted towards mortgages with lower risk level
Robust, resilient balance sheet, tilted towards mortgages with lower risk level Rate of provision Other credit 1.55% Other credit 34.7% 34.9% 1.17% Mortgages 0.66% Mortgages 65.3% 65.1% 0.50% 0.19% 0.15% 1Q/2020 2Q/2020 14
Slide 15: Deferral requests distribution over time
Deferral requests distribution over time March August 2020 2020 15
Slide 16: Housing loans - gradual return of clients to monthly repayments
Housing loans - gradual return of clients to monthly repayments Balance of deferred loans: 22.5.2020 30.6.2020 NIS 40 bil NIS 37 bil * As of August 10, 2020: NIS 16 bil - Still in first deferral period NIS 7 bil - Additional deferral granted NIS 23 bil NIS 14 bil - Returning to repayments 16 * As of
Slide 17: Continuous deposit growth
Continuous deposit growth (NIS mil) 231,784 210,984 199,492 183,573 178,252 162,380 152,379 141,244 2013 2014 2015 2016 2017 2018 2019 1H2020 H1/2020 17 (1) In annual terms
Slide 18: Growth of core deposit
Growth of core* deposit (NIS mil) Deposits growth rate 13.0% 30.6.2019 30.6.2020 Rate of Segment change House holds and Private 13.4% banking 75,721 72,434 33% 35% Small and micro 32.3% businesses Share of core deposits 99,096 Share of core deposits 112,331 48% Medium 22.8% 48% 65% businesses 67% La
Slide 19: Financing revenues from current operations continue to grow despite erosion in margins
Financing revenues from current operations continue to grow despite erosion in margins (NIS mil) 2,784 2,706 1,357 1,368 1H/2019 1H/2020 2Q/2019 2Q/2020 19
Slide 20: Increase in commissions
Increase in commissions (NIS mil) 800 756 1H/2019 1H/2020 20
Slide 21: Bank Yahav business results continue to improve
Bank Yahav business results continue to improve 80% 13% 78% 76.6% 76.2% 77.3% 11.3% 12% 75.5% 11.0% 76% 10.2% 11% 74% 10% 72% 9% 70% 7.4% 7.1% 8% 6.2% 7.1% 70.7% 68% 7% 66% 68.4% 67.7% 6% 64% 5% 62% 4% 2014 *2015 2016 2017 2018 2019 1H2020 1H/2020 להון ROEתשואה יעילות יחס Cost/income ratio 2
Slide 22: Merger with Union bank – the next step
Merger with Union bank – the next step Competition Signing an commissioner’s agreement for the approval sale of Union’s received diamond sector credit activities to Peninsula Publication of purchase offer 22
Slide 23: Merger with Union bank
Merger with Union bank Capital in NIS mil Union bank’s total capital 2,532 60% of Union bank’s total capital 1,519 UMTB’s total capital 16,653 108% of UMTB’s total capital 17,985 23
Slide 24: Financial Statements
Financial Statements 24 2019 יולי
Slide 25: Net profit and ROE
Net profit and ROE (NIS mil) 15.8% 576 11.1% 11.5% 11.3% 422 440 404 9.1% 9.0% 357 360 7.7% (1) 303 Q1/2019 Q2/2019 Q3/2019 Q4/2019 Q1/2020 Q2/2020 (1) Excluding revenues amounting NIS 82 million (net of taxes NIS 54 million) with respect to agreement with insurers 25 to conclude derivative proceedi
Slide 26: Condensed P&L report
Condensed P&L report (NIS mil) H1/2020 H1/2019 % of change Interest revenue, net 2,670 2,774 )3.7( Non interest revenues 1,068 950 12.4 Total 3,738 3,724 0.4 Expenses with respect to credit losses 615 175 251.4 Operating and other expenses 1,967 1,997 )1.5( Net profit 717 980 )26.8( 26
Slide 27: Financing revenues
Financing revenues (NIS mil) Rate of H1/2020 H1/2019 change Interest revenues, net 2,670 2,774 Non-interest financing revenues 140 146 Total financing revenues 2,810 2,920 )3.8( Less: Linkage differentials with respect to CPI position )123( 193 Revenues from collection of interest on troubled debt 1
Slide 28: Provisions / loans to the public
Provisions / loans to the public 0.66% 0.50% 0.23% 0.20% 0.15% 0.14% Q1/2019 Q2/2019 Q3/2019 Q4/2019 Q1/2020 Q2/2020 28
Slide 29: Total balance sheet items development
Total balance sheet items development (NIS mil) 30.6.2020 30.6.2019 % of change Total balance sheet 291,560 264,223 10.3 Loans to the public, net 214,450 200,728 6.8 Deposits from the public 231,784 205,188 13.0 Securities 8,440 8,816 )4.3( Equity 16,653 15,740 5.8 29
Slide 30: Capital adequacy
Capital adequacy 13.87% 13.88% 13.45% Total Ratio 10.23% 10.14% 9.96% Tier 1 30.6.2019 31.12.2019 30.6.2020 BoI minimum Tier 1 9.83% 9.83% 8.82% requirement Total Ratio 13.33% 13.33% 12.32% 30
Slide 31: Equity
Equity (NIS mil) 16,033 16,653 15,740 30.6.2019 31.12.2019 30.6.2020 31