Bank Leumi Le-Israel B.M. (LUMI) Q1 2026 earnings summary

Executive summary

• Achieved record net income of ILS/NIS 2.35 billion in Q1 2026, the highest in the Israeli banking sector, with a return on equity (ROE) of 13.6% (15.1% excluding a special tax); normalized ROE stands at 16.3%.

• Distributed ILS/NIS 1.3 billion in dividends and share buybacks, representing a 55% payout ratio and a 4.7% dividend yield.

• Maintained best-in-class efficiency with a cost-income ratio of 29.1%, reflecting ongoing technology and AI-driven improvements.

• Strong growth in credit (5.4% quarter-over-quarter, 27.5% year-over-year in corporate credit) and deposits (1.2% quarter-over-quarter, 16.5% year-over-year).

• Special tax on Israeli banks impacted Q1 earnings; main effect in 2026, expected to be negligible in 2027.

Financial highlights

• Net interest income was ILS/NIS 3.91–4.017 billion, slightly down year-over-year due to lower interest rates and negative CPI.

• Total revenues reached ILS/NIS 5.5 billion, up 1.5% year-over-year, with fee and commission income up 10.6%.

• Non-interest income rose 13.7% to ILS/NIS 1.56 billion.

• Total expenses declined by 8% year-over-year, mainly due to lower salary costs.

• Pre-provision net revenue (PPNR) increased by 6% to ILS/NIS 3.87–3.9 billion.

Outlook and guidance

• Targeting 8%-10% loan growth for 2026, with potential upside if the Israeli economy outperforms.

• Committed to maintaining ROE targets and responsible growth aligned with strict underwriting standards.

• Guidance incorporates a special tax under the 2026 state budget and assumes regulatory conditions remain stable.

• Expecting continued efficiency improvements and further AI integration to drive growth and cost reduction.

• Ongoing support for the Israeli economy during the war and commitment to social initiatives.