Bank Leumi Le-israel B.m. · TASE:LUMI
Bank Leumi Le-israel B.m — Q3 2023 Earnings Presentation
18 slides from Bank Leumi Le-israel B.m's earnings presentation, 2023
Slide 1: Q3 2023 Financial results presentation
Q3 2023 Financial results presentation
Slide 2: Disclaimer
Disclaimer This document and the information contained herein – The conference call does not replace the need to review the 1. Has been prepared by Bank Leumi le-Israel B.M. (the “Bank”) solely for the purpose of presenting the Bank's business; latest periodic / quarterly reports in 2. Is provided s
Slide 3: Solid economic fundamentals
Solid economic fundamentals GDP impact in Q4 and FY24 (Real GDP Growth) Inflation slowing (Inflation Evolution) Israel 5.3% OECD 3.4% 8.6% 2.8% 6.5% 2.7% 5.6% 5.5% 2.2% 3.8% 1.7% 2.8% 2.5% 1.8% 0.8% 1.0% 1.4% 0.6% -0.7% -2.2% -4.4% 2019 2020 2021 2022 2023E 2024E 2025E 2019 2020 2021 2022 2023E 2024
Slide 4: Key 3Q 2023 Messages
Key 3Q 2023 Messages • The Iron Swords War which began in Israel on October 7th has resulted – among other things – in a decline in economic activity and an increase in economic uncertainty and risk. • 3Q 2023 results include an increased loan loss provision of NIS 1 billion (0.95%) to reflect the l
Slide 5: Strong underlying performance
Strong underlying performance Key financial metrics Q3 2023 9M 2023 FY 2022 Net Income 1,767 5,201 7,709 ROE 13.6% 13.6% 17.0% Cost Income Ratio 32.3% 31.4% 37.2% Credit Loss Expenses 0.95% 0.56% 0.13% Q-o-Q YTD Y-o-Y Net Loan Growth 1.9% 8.4% 18.4% Q-o-Q YTD Y-o-Y Core Deposit Growth 0.5% 6.0% 9.5%
Slide 6: Bank Leumi started period in a strong position
Bank Leumi started period in a strong position ↗︎ Large cushion for credit losses ↗︎ High profitability (ROE) ↗︎ Growing equity base • Increase in allowances for • ROE averaging >15% (1). • 1.1% CET1 buffer post large 3Q doubtful debts post Covid. 2023 collective provision. 17.0% 11.30% 1.47% 11.46%
Slide 7: 9m 2023 vs. 9m 2022 – Breakdown of Income and Expenses
9m 2023 vs. 9m 2022 – Breakdown of Income and Expenses ↗︎ Finance Income ↗︎ Operating and Other Expenses 32.7% 13,090 1.7% 9,864 12,147 5,034 4,948 9,238 2,871 2,612 31.5% 9M 2022 9M 2023 CPI 4.40% CPI 3.25% 2,422 2,077 NIM 2.13% 626 943 NIM 2.63% 9M 2022 9M 2023 9M 2022 9M 2023 Net Interest Income
Slide 8: Q3 2023 vs. Q3 2022 – Breakdown of Income and Expenses
Q3 2023 vs. Q3 2022 – Breakdown of Income and Expenses ↗︎ Finance Income 30.1% 4,370 ↗︎ Operating and Other Expenses 3,358 3.1% 3,935 1,671 1,722 3,414 998 852 15.3% Q3 2022 Q3 2023 870 CPI 1.23% 435 CPI 0.77% 673 NIM 2.30% NIM 2.51% -56 9M 2022 9M 2023 Q3 2022 Q3 2023 Net Interest Income Non-intere
Slide 9: Higher Year-on-Year Net Interest Income and NIM
Higher Year-on-Year Net Interest Income and NIM 2.79% 2.59% 2.51% 2.44% 31.5% 2.30% 2.15% 1.96% 12,147 4,284 3,928 3,935 3,773 9,238 3,414 3,125 2,899 2.13% 2.63% 15.3% 3,935 3,414 2.30% 2.51% Q3 Q3 9M 9M Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 2022 2023 2022 2023 (NIS Millions) 9M 2
Slide 10: Fees and Commissions Performance Year-on-Year
10 Fees and Commissions Performance Year-on-Year 6.7% 750 2,801 2,626 558 503 472 469 440 439 450 366 385 10.4% 307 288 963 872 Q3 Q3 9M 9M Financing Account Securities Exchange Credit Cards Other Fees 2022 2023 2022 2023 Transactions Management Transactions Differentials 9M 2022 9M 2023 (NIS Millio
Slide 11: Consistent Improvement in Cost Structure
Consistent Improvement in Cost Structure ↗︎ Total Expenses ↗︎ Cost-Income Ratio 1.7% 4,948 5,034 2,871 2,612 39.5% 39.1% Total Salary & 3.1% Related Expenses 1,671 1,722 998 852 32.3% Maintenance, 2,422 31.4% Depreciation & 2,077 Other Expenses 870 673 9M 2022 9M 2023 Q3 2022 Q3 2023 9M 2022 9M 2023
Slide 12: Higher loan-loss expenses due to geopolitical situation
Higher loan-loss expenses due to geopolitical situation Specific provisions remain low 9M 2023: 0.56% ↗︎ Loan loss expenses 0.95% 0.83% 869 0.41% 0.32% 0.31% 0.11% 0.39% 0.34% 389 0.29% 0.25% 334 299 233 0.12% (0.14%) (0.02%) 0.02% 0.02% (134) (21) 17 19 122 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 S
Slide 13: While credit quality indicators remain robust
While credit quality indicators remain robust ↗︎ NPL Ratio ↗︎ Total Provisions / NPLs ↗︎ Total Provisions / Gross Loans Total troubled debts to gross loans to the public 261% 1.85% 1.79% 1.54% 1.47% 1.28% 200% 198% 6.2 1.30% 5.0 0.75% 0.74% 4.5 0.49% 2021 2022 9M 2023 2021 2022 9M 2023 2021 2022 9M
Slide 14: Loan growth in-line with strategy
Loan growth in-line with strategy ↗︎ Total Loans ↗︎ Middle-Market 417.3 409.6 64.1 64.4 403.8 1.9% 63.0 0.5% 384.8 60.8 8.4% 5.9% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 ↗︎ Mortgages ↗︎ Corporate 125.3 126.7 129.6 120.9 125.6 3.1% 1.1% 123.3 120.9 109.5 7.2% 15.7% Q4 2022 Q1
Slide 15: Expanding and diversifying deposit base
Expanding and diversifying deposit base ↗︎ Core Deposits (in Israel) ↗︎ Diversified deposit base** 6.0% 215.1 203.0 Capital 9.6% 196.3 Markets Private 26% Individuals 40% Q3 2022 Q4 2022 9M 2023 Corporate and Real Estate Deposits from the Public 8% ↗︎ Deposits from the public Loan / deposit ratio Co
Slide 16: Solid capital and leverage ratios
Solid capital and leverage ratios ↗︎ CET1 ↗︎ Total Capital Ratio ↗︎ Leverage Ratio 14.21% 14.29% 14.42% 11.50% 11.46% 11.30% 13.50% 13.50% 12.50% 10.21% 10.21% 9.19% 6.36% 6.73% 6.06% 5.5% 5.5% 5.5% 2021 2022 9M 2023 2021 2022 9M 2023 2021 2022 9M 2023 CET1 Ratio Minimum Regulatory Target TCR Minimu
Slide 17: Investment highlights
Investment highlights 1 2 3 National banking champion with Consistent and strong Best-in-class cost diversified business model and leading in financial performance income ratio digital transformation Pre-tax profit of ~NIS 800m from selling HQ buildings to be recorded in Q1 2024 4 5 6 Robust credit
Slide 18: Thank you / Q&A
Q3 2023 Results presentation Thank you / Q&A 18
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