Slide 1

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 14

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 15

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16


Slide 16

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Overview 30.09.13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Net Earnings and ROE NIS Millions

ROE

144
NIS Millions

Average
capital

6,206

6,651

6,648

5,995

6,624

Core capital
adequacy
ratio

9.33%

9.82%

10.04%

9.33%

10.04%

* Assuming core capital ratio of (9.30%), (the Israeli banking industry average core capital ratio in 1-9/2013)
the ROE is 9.4% in 1-9/2013 and 9.7% in Q3 2013.

2

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Statements of income
1-9/2013 - 1-9/2012 NIS Millions
Gross Change
change
in %

1-9/2013

1-9/2012

Interest income, net
Expenses from credit losses (0.13% provision rate) (*)

1,653
65

1,693
85

(40)
(20)

(2.4%)
(23.5%)

Net interest income after expenses from credit losses

1,588

1,608

(20)

(1.2%)

Total non-interest income

1,234

1,151

83

7.2%

140

114

26

22.8%

1,050

1,015

35

3.4%

44

22

22

100.0%

2,106

2,078

28

1.3%

Profit before taxes
Provision for taxes on profit

716
295

681
250

35
45

5.1%
18.0%

The bank’s share in profit of equity-basis investees, after taxes

23

30

(7)

(23.3%)

Net profit
ROE
Core capital ratio (end of period)

429
8.7%
10.04%

445
10.0%
9.33%

(16)

(3.6%)

Bank of Israel average interest rate

1.52%

2.44%

Of which: non-interest financing income
Commissions income
Other Income (divestment of buildings + pay back of insurance)
Total operating and other expenses

* Excluding provision for mortgages the provision rate is 0.08%

(0.92%)

3

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Income from Financing Activities (before Tax)
1-9/2013 - 1-9/2012 NIS Millions
1-9/2013 1-9/2012

Gross
change

Change
(%)

Interest income

2,612

3,006

(394)

Interest expense

(959)

(1,313)

354

Net interest income

1,653

1,693

(40)

(2.4%)

140

114

26

22.8%

1,793

1,807

(14)

(0.8%)

6

(13)

19

29

35

(6)

(17.1%)

1,771

1,794

(23)

(1.3%)

Income from divestment of bonds and shares

187

171

16

9.4%

Divestment of bonds and income from trading portfolio

131

130

1

0.8%

Income from divestment of shares

59

70

(11)

(15.7%)

Provisions for writedown of bonds and shares

(3)

(29)

26

Other financial income of financial intermediation
and unoccupied capital

1,584

1,623

(39)

Bank of Israel average interest rate

1.52%

2.44%

Non-interest financing income
Total income from interest and non-interest
Of which: Hedging of tax provision
Fair Value of derivatives
Total profit from actions of financing (interest and
non-interest)

(2.4%)
(0.92%)

4

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total Income to Total Weighted Risk Assets Ratio

5

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Operating & Other Expenses
NIS Millions
1-9/2012

1-9/2013

*
* Including amortization of 39 NIS Millions
6

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Improved Operational Efficiency Ratio (Consolidated)
Total Operating Expenses to Total Income

Total Operating Expenses / Total Income (After Expenses from credit
losses)
Total Operating Expenses / Total Income (Before Expenses from credit losses)

%
%

Total Operating Expenses
Total Income

75.3%

7

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI Strategic Assets & Liabilities
Structure NIS Billions 30.09.2013
FIBI Strategic Assets & Liabilities composite*

Capital
Adequacy
Basel II
Core Capital
Adequacy
Basel II

30.09.12

30.09.13

14.19%

15.27%

9.33%

10.04%

30.09.2013 (NIS Billions)

Credit to the Public
Public
Deposits

66.9

85.3

Estimate Core
Capital
Adequacy
Basel III

9.88%
State of Israel Bonds 8.6

Deposits to
Credit Ratio

Liquid Assets
to Deposits
Ratio

126.5%

127.6%
Gov. & Bank Bonds
2.0

34.3%

37.8%

Bank of Israel Deposits 19.5
Sovereigns Bonds 1.2
Deposits in Banks 3.1
Banks Bonds 1.7

Capital Notes 5.8

NIS, Corporate Bonds 0.8
Capital Available for
Investment 4.9

* Illustration – not to scale

Structures, Hedge funds
&Stocks 0.7
Market risk in VAR(0.07)

8

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Total balance

Equity

Total Assets, Deposits & Credit to the public
NIS Millions

Credit to
the Public

Shareholders`
equity to total
balance ratio

Public
Deposits

5.7%

5.7%

6.2%

6.3%

9

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Credit to the Public by segments
30.09.2013 NIS Millions

Change in %
Average
Balance
Compared to
1-9/2012

30.9.13

30.9.12

Change in %
Compared to
30.9.12

Private + Retail
(Households)

16,056

15,091

6.6%

6.1%

Mortgage

17,208

15,989

7.5%

13.9%

Total private clients

33,264

31,080

7.0%

10.0%

Commercial * +
Small Business

13,128

13,335

(1.5%)

(1.5%)

Corporate

20,503

21,784

(6.0%)

(3.5%)

Total Credit to the
Public

66,895

66,199

1.1%

3.0%

Total Private +
Retail 50%

* Of which, 167 NIS Millions decrease, in comparison to 30.09.12, due to the closure of FIBI London.

10

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Expenses for Credit Losses to Credit
to the Public Ratio

FIBI maintained low provisions for credit losses even during the recent credit crisis
Provisions for Credit losses 2007-9/2013

FIBI
0.76%

Other 4 Leading Banks
Change of
measurement
according to Impaired
Debts Directive

0.76%

0.43%
0.33%

0.39%

0.42%

0.44%

0.44%
0.32%
0.20%

0.28%

0.14%

* 0.13%

0.18%
0

2007

2008

2009

2010

2011

2012

*1-9/2013

*In Q1 the Bank has implemented a one time regulatory provision on mortgage portfolio in order to set the expenses for
credit losses ratio to 0.35% of the mortgage credit balance (24 NIS million). Excluding this one time provision, the ratio of
FIBI is about 0.05% in 1-9/2013 and the ratio of the group is 0.08%.
11

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Deposits from the Public
breakdown by segments NIS Millions

Change in %

30.09.13

30.09.12

Total Private +
Retail 58%

Change in %
Average
Balance
Compared
Compared to
to 30.9.12
Q3/2012

Total Private &
Retail

49,802

51,546

(3.3%)

(0.6%)

Commercial +
Small Business

10,892

10,770

0.9%

(1.8%)

Corporate

24,686

21,458

14.9%

3.9%

Total

85,380

83,774

1.9%

0.4%

The customers` securities portfolio grew in 18 NIS Billions compared to 30.9.12 (about 10% growth). In
private and retail segment the securities portfolio grew in 6 NIS Billions (about 13% growth). 25% of the
growth due to increase in the market value .

12

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

Core Capital Ratio – 30.09.13

FIBI is the only bank in Israel that has already met the new regulatory requirement for Core
Capital ratio (in 31/12/14) according to Basel II

Basel III

8.82%*-9.03%

8.89%

8.60%
**

8.54%

9.88%

Minimal Regulatory
* Requirement For
HAPOALIM&LEUMI
14.30%

14.57%

Minimal
Regulatory

Basel II**

13.42%

requirement

*

Gap

-0.76

-0.68 *

-1.3-0.72

-0.70

**

-0.16

* Core capital in FIBI is 6.8 NIS Billions up to 30.09.13, increase of 7% compared with 30.09.12.

13

FIBI

FIRST INTERNATIONAL
BANK OF ISRAEL

FIBI is demonstrating relative strength
in main financial ratios

Core capital ratio and principal financial ratios 30.09.2013

Other 4 leading Banks
Average

Ratio of core
capital to risk
assets

Deposits from
the public to
credit to the
public

Total operating
expenses /
Revenue
(before credit
losses
expenses

Expenses for
credit losses to
credit to the
public*

Dividend yield

10.04%

127.6%

72.9%

0.13%

3.52%

9.32%

108.1.%

62.8%

0.49%

0.81%

9.28%

116.2%

69.3%

0.06%

-

9.30%

130.6%

76.4%

0.52%

-

8.84%

99.5%

57.7%

0.28%

0.87%

9.24%

112.7%

67.0%

0.32%

(As 18.11.13)

14

FIBI

Changes in Net Profit Subsidiaries NIS Millions

FIRST INTERNATIONAL
BANK OF ISRAEL

Net profit
1-9/2013

Gross
change

ROE

Core Capital
Ratio

82.0

0.6

10.45%

9.5%

29.7

(7.8)

8.9%

15.9%

29.9

(2.6)

9.2%

14.5%

24.7

(10.3)

9.7%

12.9%

15

FIBI












FIRST INTERNATIONAL
BANK OF ISRAEL

1-9/2013 Highlights

Net profit - 429 NIS Million. The Profit before taxes increased – 5.1%.
The highest Core capital ratio in the banking system – 10.04%, despite a
dividend paid in June 2013. Estimated Core Capital Adequacy under Basel
III – 9.88%.
ROE in 1-9/2013 -8.7% (9.0% in Q3). Assuming the banking industry core
capital average ratio (9.30%) the ROE is 9.4% in 1-9/2013 and 9.7% in Q3.
Increase in revenue from commissions – in spite of the regulatory reforms
inflicting reductions in commissions, an increase in clients' activity in
capital markets resulted in 7.7% increase in capital markets commissions
and a slight increase in other commissions. Moreover, the 3rd quarter, due
to the timing of the Jewish holidays, included less business days, which
mainly reduced capital markets activity revenues in comparison to
previous years.
Provisions for credit losses in 1-9/2013 - 0.13% (0.08%- excluding
regulatory provision on mortgages).
Moderate growth in operating expenses - 1.3% - mainly explained by the
increase in VAT.
Operational Efficiency Ratio Improvement (before Expenses from credit
losses)- 72.9% in 1-9/2013 compared to 73.1% in 1-9/2012.

16