Bank Leumi Le-Israel (LUMI) Q3 2022 earnings summary

Executive summary

• Net income attributable to shareholders was NIS 5,383 million for 9M 2022, up 18.1% YoY; Q3 net income was NIS 1,782 million, up 14.9%.

• Higher net interest income and loan growth supported results; the Valley merger added a one-time NIS 645 million after-tax gain in H1, while market declines weighed on noninterest finance income.

Financial highlights

• 9M net interest income was NIS 9,438 million, up 21.1% YoY; consolidated interest income excluding Bank Leumi USA was NIS 9,238 million, up 28.2%.

• 9M total noninterest income was NIS 3,362 million, down 18.9%; fees and commissions rose to NIS 2,674 million, while noninterest finance income fell to NIS 646 million.

• 9M operating expenses declined 8.0% to NIS 5,106 million; profit before tax was NIS 7,509 million, up 5.5%, and basic EPS was NIS 3.62 versus NIS 3.14.

• Assets were NIS 704.1 billion, net public loans NIS 383.0 billion, public deposits NIS 546.7 billion, and shareholders' equity NIS 48.0 billion at September 30, 2022.

Outlook and guidance

• Management continued to monitor macroeconomic and credit-risk developments; loan-loss estimates may change as economic conditions and forecasts evolve.

• Housing demand had softened amid higher rates and inflation; the expected apartment shortage may support medium- to long-term demand, while near-term pricing and commercial property activity faced pressure.

• Beit Mani's sale is expected to generate a NIS 524 million pre-tax gain when staff and management relocate to Lod, expected in H2 2023.