Bank Leumi Le-Israel B.M. · TASE:LUMI

Bank Leumi Le-Israel B.M — Q3 2009 Earnings Presentation

23 slides from Bank Leumi Le-Israel B.M's earnings presentation, November 2009

  1. Slide 1: Leumi Group Third Quarter 2009 Earnings Review

    Leumi Group Israel’s Largest Bank and Leading International Financial Group Third Quarter 2009 Earnings Review

  2. 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

  3. Slide 3: Main macroeconomic variables

    Main macroeconomic variables 2008 2009* 2010* GDP 4.0% 0.0% 2.7% Gross product of the business sector 4.5% -0.9% 2.8% Annual Rates Private consumption 3.6% 0.6% 2.8% of Change, Public consumption 2.1% 2.7% 3.1% Real Terms Investment in fixed assets 4.4% -5.9% -1.0% Exports of goods and services 5.2%

  4. Slide 4: A sharp rebound in profitability

    A sharp rebound in profitability NIS millions Net profit and ROE 3Q 9M 15.3% 10.3% 8.5% + 1,470 11.0% 1,275 534 (1.6%) -84 3Q 08 3Q 09 9M 08 9M 09 Net operating profit and ROE % 4 0 .5 10.1% + 6.8% 11.0% 1,442 1,026 (1.6%) 534 -85 3Q 08 3Q 09 9M 08 9M 09 4

  5. Slide 5: P&L: profits from core banking increased

    P&L: profits from core banking increased NIS millions 9M 2009 9M 2008 Change %∆ Net interest income before provision 5,211 5,404 (193) (3.6) Operating and other income 3,308 2,255 1,053 46.7 Total Income 8,519 7,659 860 11.2 Provision for doubtful debts 1,136 1,055 81 7.7 Operating and other expense

  6. Slide 6: Net interest income: positively impacted by trading gains and mark-to-market write-backs

    Net interest income: positively impacted by trading gains and mark-to-market write-backs NIS millions 1.84% 1.85% 1.73% 1.63% 1.08% NIS millions 0.90% 0.16% 1,960 1,953 1,491 976 1,362 1,926 1,923 1Q' 08 2Q' 08 3Q' 08 4Q' 08 1Q' 09 2Q' 09 3Q'09 9M 2009 9M 2008 Change %∆ Current activities 4,806 4,88

  7. Slide 7: Provisions for doubtful debts

    Provisions for doubtful debts NIS millions 2.05% 0.68% 0.74% 0.96% 0.67% 0.87% 0.63% 0.66% 0.49% 244 316 495 1,090 354 339 443 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 9M’ 09 9M’08 Change %Δ Specific provision during the period 1,876 1,689 187 11.1% Reduction of a specific provision (686) (584) (10

  8. Slide 8: 9M'09 provisions are slightly below 10 year average

    9M’09 provisions are slightly below 10 year average NIS millions 2. 00% 0.77% 1. 80% 2,145 1,907 1. 60% 1,883 1. 40% 1,549 1,514 1,426 1. 20% 1.09% 1.09% 1. 00% 1.01% 1,136 0.93% 0.87% 933 0. 80% 0.79% 0.74% 655 0. 60% 0.51% 0. 40% 0.44% 407 0. 20% 0.20% 0. 00% 2000 2001 2002 2003 2004 2005 2006 200

  9. Slide 9: Total problematic debt is high due to watch list

    Total problematic debt is high due to watch list NIS millions 30.09.09 31.12.08 %∆ 3,845 Non-performing 2,053 2,012 2.0% Non-performing (NIS millions) Restructured or to be 1,029 963 6.9% 2,602 2,431 2,519 restructured 2,012 2,053 In temporary arrears 589 562 4.8% 1,604 Under special supervision* 13

  10. Slide 10: Operating & other income grew 46.7% YoY

    Operating & other income grew 46.7% YoY NIS millions 1,292 1,003 1,013 864 851 545 540 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 9M’09 9M’08 Change %Δ Operating Commissions 2,586 2,671 (85) (3.2) Income (losses) from 471 (478) 949 + investments in shares Other Income 251 62 189 + Total 3,308 2,255 1

  11. Slide 11: Operating expenses decreased 4.6% YoY

    Operating expenses decreased 4.6% YoY NIS millions Average = 1,734 Average = 1,654 1,794 1,801 1,746 1,758 1,662 1,640 1,564 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 9M’09 9M’08 Change Δ% Salaries and related expenses 2,864 3,149 (285) (9.1) Building and equipment maintenance and 1,110 1,020 90 8.8

  12. Slide 12: Efficiency ratio (Cost/Income)

    Efficiency ratio (Cost/Income) 118.2% 119.2% 86.0% 66.1% 63.8% 59.0% 55.8% 77.0% 54.7% 71.2% 57.5% 58.3% 56.4% 51.9% 0 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 67.9% 58.2% 63.0% 58.8% - Efficiency Ratio - Adjusted for special salary expenses 12

  13. Slide 13: Net operating profit by segment: building on diversification & strong core banking activities

    Net operating profit* by segment: building on diversification & strong core banking activities NIS millions 9M 2009 9M 2008 %∆ Contribution to profit Households 193 517 (62.7) 13.9% Small businesses 153 265 (42.3) 11.1% Corporate banking 666 447 49.0 48.1% Commercial banking 244 354 (31.1) 17.6% Pri

  14. Slide 14: Low risk: 64% of nostro investments are with governments and central banks

    Low risk: 64% of nostro investments are with governments and central banks 30 September 2009, NIS billions Investments in securities by asset class Deposits with Banks Breakdown of nostro Government Bonds 33.3 57.0% Central Banks 29.9 by counterparty Bonds of Foreign Banks BOI 26.7 15.8 27.0% & othe

  15. Slide 15: Low risk: 93% of exposure is with institutions rated A- and above

    Low risk: 93% of exposure is with institutions rated A- and above 30 September 2009, NIS billions, % of total Total exposure to foreign Exposure to securities of financial institutions* foreign financial institutions Total = 30.1 Total = 15.2 AAA to AA- AAA to 23% AA- 24% BBB+ BBB+ and and below bel

  16. Slide 16: Other Comprehensive Income: A sharp increase in the value of bonds

    Other Comprehensive Income* A sharp increase in the value of bonds NIS millions 30/09/2009 31/12/2008 ∆ Shares 686 429 257 Israel government bonds 183 434 (251) Foreign government bonds 5 9 (4) Other bonds (505)** (1,864) 1,359 Other credit instruments (23) (27) 4 Total 346 (1,019) 1,365 Related Tax

  17. Slide 17: Continuous growth despite difficult economic environment

    Continuous growth despite difficult economic environment NIS billions Total assets Deposits +10.1% +10.4% 293.8 323.6 225.9 249.4 9M 08 9M 09 9M 08 9M 09 Credit Off-balance sheet 9.5% -1.7% 399.2 437.3 207.5 204.0 9M 08 9M 09 9M 08 9M 09 17

  18. Slide 18: A diversified credit portfolio

    A diversified credit portfolio NIS millions 21.0% 3.0% 9.0% 34.0% Retail= 44% * 32.0% 1.0% Credit 30/09/2009 31/12/2008 %∆ 9M2009 Households 65,401 62,145 5.2% Small businesses 17,283 18,161 (4.8%) Commercial banking 43,747 48,506 (9.8%) Corporate banking 70,016 76,563 (8.6%) Private banking 6,286 6

  19. Slide 19: Strong capital base and core Tier 1 – a competitive advantage

    Strong capital base and core Tier 1 – a competitive advantage Capital to risk weighted assets, % 14.14 Total 11.55 11.56 11.52 11.58 11.25 Core Tier I/ TCE* 8.39 7.53 7.46 7.53 7.55 7.51 Development of Capital NIS billions 21.1 19.5 18.7 17.5 16.0 15.0 2004 2005 2006 2007 2008 9M’ 9M’09 19

  20. Slide 20: A strong balance sheet provides adequate platform to face crises and support future growth plans

    A strong balance sheet provides adequate platform to face crises and support future growth plans • Capital adequacy ratio 14.14% Solid capital base • Core tier 1 capital 8.39% Liquid balance sheet • Loans/deposits ratio 81.8% • Credit to total assets: 63.0% ‘Plain vanilla’ vanilla’ balance sheet • D

  21. Slide 21: Low risk, high return

    Low risk, high return as of 18/11/09 ,% Shareholders’ Shareholders’ Returns* From 1.1.09 3 years 5 years Leumi 94 -4 87 TA Banks Index 86 -16 60 TA 100 78 8 72 MSCI World -36 52 -17 Banks Index * Stock appreciation & dividends 21

  22. Slide 22: Israel's leading and most profitable international banking group

    Israel’s leading and most profitable international banking group The Leumi Group in perspective in billions 9M 2009 Compared to Israeli peers * Total Assets NIS 324 1 Total Deposits NIS 249 1 Total Credit NIS 204 2 Net Profit NIS 1,470 1 Market Cap ** US$ 6.2 1 Core Tier 1 Capital Ratio 8.39% 2 * Ba

  23. Slide 23: Thank You

    Thank You Wherever you wish to go, Leumi is with you 23

Bank Leumi le-Israel B.M. — Q3 2009 Earnings Presentation on 6ix