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Bank Leumi posts YOY rise in Q4'16 profit, adopts new dividend policy

Bank Leumi le-Israel B.M. on March 30 reported fourth-quarter 2016 net profit attributable to shareholders of 443 million Israeli shekels, up from 431 million shekels in the same period a year ago.

EPS for the quarter amounted to 27 agorot, compared to 29 agorot a year earlier.

Net interest income rose to 1.87 billion shekels from 1.73 billion shekels in the fourth quarter of 2015, while commissions fell over the same period to 994 million shekels from 993 million shekels.

The Israeli lender reported other income of 105 million shekels, compared to 481 million shekels in the fourth quarter of 2015.

Amortization of intangible assets and goodwill was nil for the fourth quarter of 2016, compared to a charge of 5 million shekels a year earlier. Expenses in respect of credit losses increased to 46 million shekels from the year-ago 33 million shekels.

Bank Leumi's full-year 2016 net profit attributed to shareholders of the banking corporation amounted to 2.79 billion shekels, compared to 2.84 billion shekels a year earlier. EPS declined to 1.84 shekels from 1.92 shekels in 2015.

ROE for 2016 stood at 9.3%, compared to 10.3% a year ago.

The bank's capital adequacy ratio under Basel III reached 15.21% as of Dec. 31, 2016, of which the core capital ratio was 11.15%, up from 9.58% a year ago. The leverage ratio stood at 6.77% as of Dec. 31, 2016.

Bank Leumi said it will adopt a new dividend policy, marking the lender's first dividend distribution since 2011. The bank's board of directors approved on March 29 the distribution of a dividend of 20% of the net profit, with effect from the first quarter of 2017.

"The high capital adequacy we have reached will enable further expansion and allow for a dividend distribution for the first time in six years," CEO and President Rakefet Russak-Aminoach said.

As of March 29, US$1 was equivalent to 3.63 Israeli shekels.