#Israel #Tel Aviv #financial results #Net Income #Bank Leumi

Bank Leumi’s Remarkable Financial Performance for Q1 2025

Bank Leumi (TASE: LUMI) has released its financial statements for the first quarter of 2025, demonstrating impressive resilience and growth amidst challenging conditions in the region. The bank reported a net income of NIS 2.4 billion (approximately $646 million), a notable 12% increase compared to the same period last year, where the figure stood at NIS 2.1 billion ($565 million).

Key Financial Highlights

• - The Return on Equity (ROE) stands at 15.4% for Q1 2025, showcasing the bank's efficient utilization of shareholders' equity. In comparison, the ROE was 15.6% in Q1 2024.
• - The capital return for this quarter is reported to be NIS 961 million ($258 million), which includes a cash dividend of NIS 721 million ($194 million) along with a share buyback. This capital return represents approximately 40% of Bank Leumi's net income for the quarter.
• - The efficiency ratio has also improved, decreasing from 33.4% in Q1 2024 to 32.1% in the current quarter.

These figures illustrate Bank Leumi's ability to maintain a strong financial position, even in the face of ongoing geopolitical tensions and economic uncertainty that have characterized the region since late 2023.

Loan Portfolio Quality and Growth

Bank Leumi has focused on responsible growth within its loan portfolio, particularly in the corporate, commercial, and mortgage sectors. From the beginning of the year, the overall credit portfolio has increased by 1.6%. Breaking it down further:

• - The corporate portfolio, which also includes real estate loans, has grown by 4.2%.
• - The commercial portfolio and mortgage segments have seen a rise of 0.8% and 1.2%, respectively.

The bank's loan portfolio quality remains robust, with a non-performing loans (NPL) ratio of 0.51% and a troubled debt rate of 1.39%, marking some of the lowest figures in the banking system. Furthermore, the loan loss expenses have significantly decreased to only 0.05% of the average outstanding loans to the public, indicating effective risk management.

Supporting the Community

In light of the ongoing situation and its effects on the public, Bank Leumi has introduced several initiatives supporting customers across Israel, particularly for those affected by the circumstances since late 2023. The bank’s community-oriented approach includes various benefits for reservists, business owners, and self-employed individuals, ensuring that customers receive relief through customized programs. These measures highlight the bank's commitment to both economic health and community welfare.

Major initiatives include:

• - Exceptional interest rate reductions or exemptions for negative current account balances.
• - Mortgage payment deferrals, facilitating easier terms for paying customers.
• - Donations estimated at NIS 428 million ($115 million), aimed at supporting residents in high-conflict areas, assisting IDF soldiers, and funding local recovery projects.

Commitment to Transparency and Future Outlook

Bank Leumi's financial statements and the proactive measures it has taken reflect a strong commitment to transparency and community support, even amidst geopolitical challenges. As the bank strives to adapt to market conditions, it continues to prioritize customer needs and maintain a robust financial stance, with a Common Equity Tier 1 Capital Ratio of 12.15% and total capital ratio of 14.83% as of March 31, 2025.

Looking forward, Bank Leumi remains focused on strategic growth while continuing its role as a pillar of support for the Israeli community. The management has expressed optimism for future quarters, ensuring ongoing adaptations to evolving economic landscapes while ensuring that financial objectives align with broader societal goals.