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Bank Leumi announces share buyback as Q1 profit rises YOY

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Bank Leumi announces share buyback as Q1 profit rises YOY

Bank Leumi le-Israel BM reported first-quarter unaudited net income attributable to the bank's shareholders of 1.09 billion shekels, up from the audited 730 million shekels earned in the same period in 2018.

EPS amounted to 73 agorot in the quarter, up from the year-ago 48 agorot. Annualized return on capital rose over the same period to 12.7% from 9.0%.

Net interest income increased on a yearly basis to 2.12 billion shekels from 2.01 billion shekels, while fees and commissions dropped to 809 million shekels from 1.02 billion shekels. Noninterest finance income reached 665 million shekels, up from 51 million shekels in the first quarter of 2018, driven by a pretax gain of 314 million shekels from the sale of Leumi Card Ltd.

Total operating and other expenses fell year over year to 1.95 billion shekels from 1.98 billion shekels.

Bank Leumi's ratio of common equity Tier 1 capital to risk-weighted components was 11.65% at the end of March, compared to 11.07% as of Dec. 31, 2018. The total capital ratio to risk components stood at 15.07% at March-end, compared to 14.54% at the end of 2018.

The bank's board of directors approved a share buyback plan of up to 700 million shekels. The buyback will take place in two separate stages, with the first stage to begin May 28 and end on either August 2 or by the time 350 million shekels worth of shares have been purchased, whichever is earlier. Should the bank decide to proceed with the second stage, the process will end on either May 27, 2020, or by the time 700 million worth of shares have been purchased, whichever is earlier.

The share buyback plan has received approval from the Bank of Israel, subject to meeting restrictions in capital targets, including the condition wherein the buyback will cease if the bank's CET1 ratio falls below 10.9%.

The board also approved the distribution of roughly 437 million shekels in dividends for the first quarter, corresponding to 29.23 agorot per share of 1 shekel par value, although the bank noted that the final dividend amount per share is subject to changes due to the share buyback plan. The record date was set at June 10, while the dividend will be paid June 23.

As of May 24, US$1 was equivalent to 3.60 Israeli shekels.