Bank Leumi Le-Israel B.M. (LUMI) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income reached ILS/NIS 2.3 billion, up 29.8% year-over-year, with ROE of 15.5% and strong credit quality despite a challenging macroeconomic and geopolitical environment.

• Book value per share increased 3.8% quarter-on-quarter and up to 16.1% year-over-year, reaching nearly ILS 40.

• Cost-income (efficiency) ratio improved to 31.1% in Q3 and 29.6% for the first nine months.

• Significant relief programs and donations were implemented in response to the ongoing war.

• High shareholder returns delivered through dividends and buybacks, totaling over ILS/NIS 2.9 billion for the first nine months.

Financial highlights

• Net interest income rose 16% year-over-year in Q3, reaching NIS 4,545 million, driven by credit portfolio growth and higher CPI.

• Net loan growth was 3% quarter-on-quarter and 6.5% year-to-date, with public deposits up 8% year-over-year.

• Credit loss expense ratio was 0.28% in Q3, with a nine-month net credit loss expense ratio of 0.16%.

• Book value per share grew 3.8% quarter-on-quarter and up to 16.1% year-over-year.

• Earnings per share for Q3 2024 were NIS 1.51, up from NIS 1.15 in Q3 2023.

Outlook and guidance

• GDP growth for Israel in 2024 is expected at 0.6%, rebounding to 3.9% in 2025 if the war ends early next year.

• Inflation remains elevated at 3.5% year-over-year; no near-term rate cuts expected from the Bank of Israel.

• Management anticipates continued credit growth, especially if geopolitical conditions improve.

• Relief programs and aid for customers and communities are ongoing due to the war.

• Capital return options, including higher payout ratios or one-time dividends, will be considered post-war.