Israel's Mizrahi-Tefahot Bank reports drop in first quarter profit

About this update from Mizrahi Tefahot Bank Ltd

Israel's Mizrahi-Tefahot Bank TASE:MZTF reported a 4% decline in quarterly net profit on Tuesday, citing lower financing income and a special tax on the sector.Mizrahi, Israel's third largest bank, said it earned 1.24 billion shekels ($428 million) in the first quarter, down from 1.29 billion a year earlier.Excluding the tax and some benefits to customers, such as grants to enable businesses in the north to withstand the impact of the conflict with Hezbollah in Lebanon, net profit in the January-May period was 1.44 billion shekels.Israeli banks must pay a combined 3 billion shekels in extra taxes in ​2026 as a penalty for what the finance ministry says are excessive profits banks posted after interest rates spiked in 2022. Interest rates on deposit accounts rose far more slowly than on mortgages and other loans, the ministry ​said.Financing revenues, before expenses due to credit losses, dipped 2% to 2.88 billion shekels, while the loan loss provision shrank to 31 million shekels from 103 million.The value of total loans to individuals and businesses grew 14% over a year earlier.The bank's ratio of Tier I equity to risk components slipped to 10.17% from 10.37%. Return on equity fell to 14.1% from 16.2% a year earlier.Mizrahi said it would pay a dividend of 619 million shekels - 50% of first quarter net profit.($1 = 2.8995 shekels)

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