Bank Leumi Le-israel B.m. · TASE:LUMI

Bank Leumi Le-israel B.m — FY2022 Earnings Presentation

24 slides from Bank Leumi Le-israel B.m's earnings presentation, March 2023

  1. Slide 1: December 31, 2022 Financial Results Presentation

    DECEMBER 31, 2022 FINANCIAL 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: CEO Open Remarks & Strategy

    CEO OPEN REMARKS & STRATEGY Db x ¢

  4. Slide 4: Record Results

    Record Results ROE Net Income 17.0% 7,709 15.0% 6,028 9.8% 3,522 5.7% 2,101 2019 2020 2021 2022 2019 2020 2021 2022 Reported. (NIS Millions) Excluding the Leumi Card sale proceeds, ROE and Net Income in 2019 was 9.2% and NIS 3.3bn. Excluding the Leumi USA merger proceeds, ROE and Net Income in 2022

  5. Slide 5: Key Areas of Focus Wrapping Up

    Key Areas of Focus Growth in dedicated Differentiation Technology ESG segments • Increased middle market • Meetings with bankers • Digital penetration levels • Increase in green credit and corporate credit by and completion of to >80% in 2022 from portfolio by NIS 6 billion in Wrapping Up NIS 34 bil

  6. Slide 6: Financial Overview

    FINANCIAL OVERVIEW Db x ¢

  7. Slide 7: Key Financial Metrics

    Key Financial Metrics 2022 2021 Q4 2022 Net Income (NIS millions) 7,709 6,028 2,326 ROE 17.0% 15.0% 19.0% Credit Loss Expense (Income) 0.13% (0.25%) 0.32% Cost / Income 37.5% 46.8% 31.8% PPNR YoY Growth 39.9% 39.5% 88.3% ROA 1.2% 1.0% 1.3% Excluding the Leumi USA merger proceeds, Net Income, ROE and

  8. Slide 8: Growth in Revenues and Profits

    Growth in Revenues and Profits Revenues Expenses Net Income 30.9% 18,229 7,709 13,922 118.9% (13.6%) 7,908 6,835 3,522 2019 2022 2019 2022 2019 2022 Reported. Revenues = Total Income; Revenues and Net Profit is NIS Millions, EPS is NIS. Excluding the Leumi Card sale proceeds, Net Income in 2019 was

  9. Slide 9: ROE Expansion and Strong EPS and BVPS Growth

    ROE Expansion and Strong EPS and BVPS Growth ROE EPS BVPS 33.0 38.1% 17.0% 5.1 23.9 116.9% 9.8% 2.4 2019 2022 2019 2022 2019 2022 Reported. BVPS = Shareholders Equity / Weighted Average Number of Shares. Excluding the Leumi Card sale proceeds, ROE in 2019 was 9.2%. Excluding the Leumi USA merger pro

  10. Slide 10: Ongoing Decline in Cost-Income Ratio; Now Comfortably <40%

    Ongoing Decline in Cost-Income Ratio; Now Comfortably <40% 56.8% 53.2% 45.8% 37.2% 2019 2020* 2021* 2022* * Excluding Leumi USA.

  11. Slide 11: 2021 vs. 2022 – Breakdown of Income and Expenses

    2021 vs. 2022 – Breakdown of Income and Expenses Finance Income Operating and Other Expenses 14,399 (2.0%) 27.9% 11,259 6,811 13,011 6,677 3,861 3,842 9,565 36.0% 2021 2022 CPI 2.4% CPI 5.3% 2,950 2,835 NIM 1.95% 1,694 1,388 NIM 2.21% 2021 2022 2021 2022 Net Interest Income Non-interest Finance Inco

  12. Slide 12: Q4 2021 vs. Q4 2022 – Breakdown of Income and Expenses

    Q4 2021 vs. Q4 2022 – Breakdown of Income and Expenses Finance Income Operating and Other Expenses 4,535 66.5% 0.9% 3,773 1,729 1,713 2,724 934 971 2,359 59.9% Q4 2021 Q4 2022 CPI 0.2% CPI 0.9% NIM NIM 779 758 1.85% 762 2.44% 365 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Net Interest Income Non-interest Finan

  13. Slide 13: Fees and Commissions Performance Year-over-Year

    Fees and Commissions Performance Year-over-Year Fees & Commission Evolution: (NIS, Mn) 4.6% (NIS, Mn) 3,335 3,487 3,335 3,487 3,135 (4.3%) 900 861 Q4 Q4 2021 2022 2020 2021 2022 2021 2022 Fees & Commission Evolution by Type: (NIS, Mn) 725 752 650 674 639 607 571 587 477 402 356 382 Securities Transa

  14. Slide 14: Consistent Improvement in Operating Efficiency

    Consistent Improvement in Operating Efficiency Disciplined Cost Structure Cost-income Ratio (2.0%) 6,811 6,677 3,861 3,842 45.8% 46.6% 0.9% Total Salary & Related Expenses 1,713 1,729 37.2% Maintenance, 934 971 31.8% Depreciation & Other Expenses 2,950 2,835 779 758 2021 2022 Q4 2021 Q4 2022 2021 20

  15. Slide 15: Long-term Streamlining of the Business

    Long-term Streamlining of the Business Number of Employee Positions Income Per Employee Net Loans Per Employee 59.4% 48.75 54.1% 40.26 (14.6%) 2.23 9,239 33.50 1.83 30.57 8,816 8,516 1.45 1.44 7,893 2019 2020 2021 *2022 2019 2020 2021 2022 2019 2020 2021 2022 Income Per Employee in NIS millions. Tot

  16. Slide 16: Loan Growth Continues in Line with Strategy

    Loan Growth Continues in Line with Strategy Total* Middle-Market 18.4% 18.3% 384.8 60.8 51.4 325.0 2021 2022 2021 2022 Mortgages Corporate 15.7% 28.7% 109.5 120.9 104.5 85.1 2021 2022 2021 2022 (NIS Billions) Corporate includes Corporate and Real-Estate. The growth is mainly from Real-Estate. * Excl

  17. Slide 17: Robust Credit Quality Indicators

    Robust Credit Quality Indicators NPL Ratio Total Provisions / NPLs Total Provisions / Gross Loans 4.00% Total Troubled Debts to Gross 3.50% 2.87% Loans to the Public 3.00% 261% 1.97% 1.85% 2.50% 1.76% 1.54% 2.00% 1.50% 1.15% 1.00% 1.35% 0.50% 174% 1.28% 0.00% 155% 1.16% 152% 0.75% 0.75% 0.49% 2019 2

  18. Slide 18: Increase in Collective Provisions; Specific Provisions Remain Low

    Increase in Collective Provisions; Specific Provisions Remain Low Loan Loss Expenses (as % of Loans to the Public) Quarterly Loan Loss Expenses (as % of Loans to the Public) 0.32% (NIS, Mn) (NIS, Mn) 0.14% 0.13% 0.11% 0.34% 334 0.25% -0.04% 0.26% 0.25% 928 237 233 0.14% -0.25% 124 -0.18% -0.12% -0.1

  19. Slide 19: Solid and Diverse Deposit Base. Conservative, Well-funded Portfolio

    Solid and Diverse Deposit Base. Conservative, Well-funded Portfolio 600.0 557 Deposits from the Public December 31, 2022 550.0 515 500.0 Retail 0% Small Businesses 450.0 428 27% 100% 36% Commerical 400.0 374 363 365 Corporate & Real Estate 74% 10% 350.0 Capital Markets 69% 17% 10% 300.0 Subsidiaries

  20. Slide 20: Dividend Distribution and Policy

    Dividend Distribution and Policy • Increase in dividend payout to 30% of 4Q 2022 net income (NIS 698 million) from 20% Return to Shareholders in 9M 2022. 2.6 • 4Q dividend payment reflects an annualized 2.1 1.8 yield of 6.4% (1). 1.4 • Total payout for 2022 is NIS 1.8 billion. 0.7 • Dividend distrib

  21. Slide 21: Solid Capital and Leverage Ratios

    Solid Capital and Leverage Ratios CET1 Minimum internal Total Capital Ratio Minimum regulatory threshold: 10.50% requirement: 13.50% 11.88% 11.87% 11.50% 11.46% 15.67% 15.58% 14.21% 14.29% 10.27% 10.19% 10.21% 9.23% 13.50% 13.50% 13.50% 12.50% 37.6 39.3 43.1 48.8 49.6 51.6 53.3 60.8 2019 2020 2021 2

  22. Slide 22: Slower Growth Expected in 2023 but Fundamentals Remain Strong

    Slower Growth Expected in 2023 but Fundamentals Remain Strong Robust Economic Growth Further Rate Hikes Expected (Real GDP Growth Evolution) (Rates(2) Evolution) 8.6% 4.57% 4.33% 4.25% 6.4% 5.6% 4.0% 3.8% 3.08% 3.25% 2.4% 1.7% 2.8% 2.7% 0.8% 2.00% -2.2% 1.58% -4.4% 0.33% 0.10% 0.07% 0.10% 0.75% 2018

  23. Slide 23: Main 4Q and 2022 Takeaways

    Main 4Q and 2022 Takeaways 1 Consistent and Strong Financial Performance 2 Responsible Growth in Credit in Strategic Segments 3 Robust Credit Portfolio – Low NPLs and Low Problematic Debts 4 Best-in-class Cost Income Ratio 5 Strong Growth in PPNR – Substantial Increase in Revenues and Decline in Cos

  24. Slide 24: Thank You / Q&A

    THANK YOU / Q&A Db x ¢

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