Bank Leumi Reports Robust Second Quarter 2026 Earnings with Record Profit and Efficiency Metrics

Bank Leumi's Strong Second Quarter 2026 Performance

Bank Leumi (TASE: LUMI), a leading financial institution in Israel, has announced exceptional financial results for the second quarter of 2026. The bank reported a net income of approximately NIS 2.8 billion (about $940 million), reflecting a notable increase of 8.5% from NIS 2.6 billion ($873 million) in the same period last year. Excluding a special bank tax, the net income would have reached around NIS 3.1 billion ($1 billion). This robust performance has propelled the net income for the first half of the year to approximately NIS 5.2 billion ($1.7 billion), placing it comfortably within the bank's annual profitability target of NIS 9-11 billion.

Key Financial Indicators

Among the most notable metrics for the quarter is the return on equity (ROE), which reached 16.3%, slightly above the 16.2% reported during the corresponding quarter last year. When excluding the impact of the special tax, ROE soared to 17.9%, marking a significant achievement for the institution. The first half of the year also saw a commendable ROE of 14.9%, exceeding the target range established in the bank's 2026 strategic plan.

The efficiency ratio—a critical measure of operating efficiency in the banking sector—stood at a remarkable 24.7% in Q2 2026, showcasing a significant improvement from 29.1% in the previous quarter and 26.9% a year earlier. This figure continues to affirm Bank Leumi's position as the leader in efficiency within Israel's banking industry and among its global counterparts. The bank credits its success to the effective implementation of its technology and artificial intelligence strategies.

Substantial Capital Returns

In line with its strategic objectives, Bank Leumi also announced a substantial capital return for Q2. A total of NIS 1.4 billion ($470 million) will be distributed to shareholders, of which NIS 1.1 billion ($369 million) will be in cash dividends, with the remainder allocated to share buybacks. This capital return represents 50% of the quarterly net income, reflecting the bank's commitment to providing value to its shareholders.

Responsible Growth in Lending

During the second quarter, Bank Leumi focused on sustainable lending growth, particularly in the corporate and mortgage market segments. The bank's total loan portfolio rose by 3.4% during the quarter, with a cumulative growth rate of 9% since the beginning of the year. Specifically, corporate credit surged by 14%, while the commercial and mortgage portfolios grew by 6.5% and 4.1%, respectively. All growth metrics exceeded the targets established in the strategic plan, which aimed for an annual growth rate of 8%-10%.

As the bank expands its lending portfolio, it continues to maintain rigorous credit quality standards. The non-performing loan (NPL) ratio stands at a low 0.45%, underscoring the institution's prudent approach to risk management. Loan loss expenses for Q2 amounted to NIS 291 million ($98 million), reflecting an expense rate of 0.20%, consistent with the bank's robust credit monitoring practices.

Strong Deposit Growth

As a testament to its solid performance, Bank Leumi also reported a 3.4% increase in public deposits, totaling NIS 719 billion ($241 billion). Notably, deposits from the retail segment alone saw a minor increase of 1.3%, demonstrating a stable customer base that continues to trust the bank for their financial needs.

Overall Financial Health

The bank's capital adequacy remains strong, with a common equity tier one (CET1) ratio of 11.65% and a total capital ratio of 14.43%. The liquidity coverage ratio was reported at 122%, showing a healthy liquidity position conducive to future growth and stability.

In conclusion, Bank Leumi's second quarter results for 2026 highlight its resilience and leadership in the financial sector. The impressive profit figures, efficiency metrics, and commitment to sustainable growth not only reflect the bank's successful execution of its strategic initiatives but also bode well for its future trajectory as it continues to adapt in a dynamic market environment.