Mizrahi Tefahot Bank Ltd · TASE:MZTF
Mizrahi Tefahot Bank — Q2 2017 Earnings Presentation
33 slides from Mizrahi Tefahot Bank's earnings presentation, August 2017
Slide 1: Financial Statements June 2017
Financial Statements June 2017 Financial Statements 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 constitutes information from the bank's 2017 quarterly reports and/ or immediate reports, as well as the periodic, quarterly and ann
Slide 3: Facing new challenges and opportunities
Facing new challenges and opportunities: - Possible acquisition and merger of Union Bank into Mizrahi Tefahot - A new collective agreement 2016 - 2021 3
Slide 4: Mizrahi Tefahot Bank's acquisition of Union Bank would be credit positive
“Mizrahi Tefahot Bank’s acquisition of Union Bank would be credit positive”* “Union Bank is significantly weaker than Mizrahi as a brand and in terms of profitability and efficiency. The bank was loss making in 2016 and had a cost-to-income ratio (adjusted for one-offs) of around 85% during 2016, mu
Slide 5: The acquisition received the support of the supervisor of banks
The acquisition received the support of the supervisor of banks “Israel bank regulator signals support for Mizrahi – Union deal - Merger would boost competition in Israel’s banking sector - Mizrahi hopes to take on Israel’s leaders in corporate landing”* “We are for a merger between Mizrahi and Unio
Slide 6: MOU regarding a new collective agreement
MOU regarding a new collective agreement • Synchronizing the agreement with the strategic plan – including industrial peace until end of 2021 • For the first time in the Israeli banking system – part of the remuneration of all employees is linked to ROE goals • For the first time in the bank – creat
Slide 7: It is all about GROWTH
oo MIZRAHI TEFAHOT “It is all about GROWTH”
Slide 8: Continuous loan growth
Continuous loan growth Credit to the public NIS mil 177,133 171,341 159,204 147,569 138,565 128,651 2012 2013 2014 2015 2016 2Q2017 2Q2017 Average annual growth rate 7.4% 8
Slide 9: Continuous loan growth (quarterly)
Continuous loan growth Credit to the public NIS mil 177,133 173,068 171,341 168,620 165,515 162,073 159,204 157,996 152,317 150,694 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 9
Slide 10: Credit growth in most segments
Credit growth in most segments Double digit growth in small businesses and medium businesses for the first time Loans to the public 30.6.2017 30.6.2016 % of change Housing loans 117,585 110,007 6.9% Households 19,797 17,533 12.9% Private banking 88 86 2.3% Small and micro 16,169 14,551 11.1% busines
Slide 11: Continuous deposit growth
Continuous deposit growth Deposits from the public NIS mil 180,680 178,252 162,380 152,379 141,244 128,081 2012 2013 2014 2015 2016 2Q2017 2Q2017 Average annual growth rate 8 % 11
Slide 12: Financing revenues from current operations continue to grow
Financing revenues from current operations continue to grow (NIS m) 1,071 1,047 1,018 990 946 922 909 898 854 849 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 12
Slide 13: Growth in financing revenues in all main business segments
Growth in financing revenues in all main business segments Financing revenues (NIS m) Q2/2017 Q2/2016 % of change Housing loans 318 270 17.8% Households 300 262 14.5% Private banking 15 14 7.1% Small and micro 215 191 12.6% businesses Medium businesses 54 47 14.9% Large businesses and 149 144 3.5% i
Slide 14: And taking market share in relevant segments
”And taking market share in relevant segments“ 14
Slide 15: Market share in Israel in business credit and deposit
Market share in Israel* in business credit and deposit – growth** and targets*** Credit to medium businesses Deposits from medium businesses Credit to small and micro businesses Deposits from small and micro businesses * According to supervisory operating segments, % out of 5 major banking groups **
Slide 16: Increase in net profit and total financing revenues
Increase in net profit and total financing revenues from current operations (y/y) Total financing revenues Net profit from current operations 400 1,071 13.2% 17.6% 946 340 2Q2016 2Q2017 2Q2016 2Q2017 16
Slide 17: Mortgages – balance and revenues
Mortgages –balance and revenues* 275 262 249 244 235 215 * Operating segments in conformity with management approach. 17 Note 12 to quarterly reports, Note 29 to annual reports
Slide 18: Continue to control expenses
Continue to control expenses – maintenance & depreciation of buildings and equipment and other expenses 2.3% 632 325 618 )2.8%( 307 1H2016 1H2017 2Q2016 2Q2017 18
Slide 19: Continue to improve efficiency
Continue to improve efficiency 59.2% 57.8% 57.5% 56.3% 1H2016 1H2017 2Q2016 2Q2017 19
Slide 20: Continue to improve ROE
Continue to improve ROE 12.7% 11.4% 11.6% 10.6% 1H2016 1H2017 2Q2016 2Q2017 20
Slide 21: Increasing equity base
Increasing equity base Core tier 1 as of Q2/2017 – 10.15% 13,276 12,714 11,847 10,797 9,681 8,730 7,601 2011 2012 2013 2014 2015 2016 2Q2017 2Q2017 Average annual growth rate 10.7% 21
Slide 22: Double digit ROE despite dramatic increase in equity
Double digit ROE despite dramatic increase in equity and extremely low interest rate ROE(%) Equity (NIS mil) 16% 13,276 12,714 13,000 14% 13.1% 11,847 11.4% 11.8% 12,000 12% 10.6% 10% 2% 10.0% 10.2% 11,000 8% 9,681 10,797 10,000 6% 8,730 4% 1% 9,000 2% 0.25% 0.1% 0.1% 8,000 0.1% 0% 7,000 2012 2013 2
Slide 23: Dividend distribution – payout of 30% of net profit
Dividend distribution –dividend payout of 30% of net profit Dividend distribution for the relevant period (NIS mil) 216 190 120 122 75 2010 2011 2012 2013 2014 2015 2016 1H2017 1H2017 23
Slide 24: Financial results
oo MIZRAHI TEFAHOT Financial results 24
Slide 25: Net profit (NIS mil)
Net profit (NIS mil) 400 373 340 321 288 265 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 25
Slide 26: Net profit (NIS mil) H1-2016 H1-2017
Net profit (NIS mil) 721 628 H1-2016 H1-2017 26
Slide 27: Equity (NIS bil)
Equity (NIS bil) 12,714 13,276 12,384 30.6.2016 31.12.2016 30.6.2017 27
Slide 28: Loans to the public (NIS bil)
Loans to the public (NIS bil) 177.1 171.3 159.2 147.6 138.6 31.12.2013 31.12.2014 31.12.2015 31.12.2016 30.6.2017 28
Slide 29: Deposits from the public (NIS bil)
Deposits from the public (NIS bil) 178.2 180.7 162.4 152.4 141.2 31.12.2013 31.12.2014 31.12.2015 31.12.2016 31.3.2017 30.6.2017 29
Slide 30: Financing Revenues (NIS mil)
Financing Revenues (NIS mil) Rate of H1- 2017 H1- 2016 change Interest revenues, net 2,200 1,774 Non-interest financing revenues 20 136 Total financing revenues 2,220 1,910 16.2 Less: Linkage differentials with respect to CPI position 84 (62) Revenues from collection of interest on troubled debt 22
Slide 31: Provisions / loans to the public
Provisions / loans to the public 0.19% 0.14% 0.14% 0.12% 0.09% 0.01% Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 31
Slide 32: Cost / income ratio
Cost / income ratio 60.8 59.0 58.5 57.8 56.3 55.2 Q1 Q2 Q3 Q4 Q2 Q1 2016 2017 32
Slide 33: Capital adequacy
Capital adequacy 13.80% 13.23% 13.42% Total Ratio 9.65% 10.10% 10.15% Tier I 30.6.2016 31.12.2016 30.6.2017 33