Provisions made by Bank Leumi (TASE: LUMI) for the decline in value of its shares in Valley National Bank reduced its second-quarter profit by 8%, which amounted to NIS 2.3 billion. The bank announced last month that it would take a write-down due to the decline in the share price of the U.S. bank, in which it holds a 14% stake. The write-down amounted to NIS 600 million. Excluding the write-down, Bank Leumi’s return on equity in the second quarter was 20.2% annualized.
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Due to the write-down, Bank Leumi’s second-quarter profit was 18 percent lower than the first-quarter profit of NIS 2.8 billion.
Bank Leumi has announced a cash dividend of NIS 681 million. In addition, the bank will buy back its shares worth NIS 227 million. The dividend and share buyback together account for 40% of the quarterly profit.
Net interest income in the second quarter was NIS 4.8 billion, up 2.2% compared to the second quarter of 2023. Like Bank Hapoalim, which reported earlier today, Bank Leumi recorded a NIS 18 million income from its loan loss provision, thanks to the recovery of previously written-off loans. In the corresponding period last year, the bank recorded an expense of NIS 318 million for this item.
Loans to the public amounted to NIS 433.8 billion at the end of the second quarter, up 5.9% year-on-year. Deposits from the public increased 8.8% year-on-year to NIS 581 billion.
Published by Globes, Israel Business News – en.globes.co.il – on August 14, 2024.
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