Bank Leumi Le-Israel (LUMI) Q4 2022 earnings summary

Executive summary

• 2022 net income reached NIS 7,709 million, up 28% YoY, with 17.0% ROE; higher net interest income and the Valley merger gain contributed to results.

• Q4 net income was NIS 2,326 million versus NIS 1,470 million in Q4 2021; Q4 ROE was 19.0% versus 14.0%.

Financial highlights

• Total income was NIS 18,229 million versus NIS 15,857 million; net interest income was NIS 13,211 million versus NIS 10,346 million.

• Operating and other expenses fell to NIS 6,835 million from NIS 7,428 million; reported efficiency ratio improved to 37.5% from 46.8%.

• Basic and diluted EPS were NIS 5.14 versus NIS 4.15; comprehensive income was NIS 7,233 million versus NIS 5,943 million.

• Excluding Bank Leumi USA results, net interest income rose 36% to NIS 13,011 million; efficiency ratio was 37.2%, or 38.9% excluding the Valley merger gain.

• Net loans to the public were NIS 384.8 billion, up 18.4% excluding Bank Leumi USA; public deposits rose 8.2% to NIS 557.1 billion on the same basis.

Outlook and guidance

• The NIS 524 million pre-tax gain from the Beit Mani sale is expected to be recorded after management and staff relocate to Lod, anticipated in H2 2023.

• Green financing initiatives totaled NIS 18 billion in 2022, against a NIS 35 billion target by 2030; a USD 500 million green bond and EIB financing collaboration were announced in Q1 2023.

• Legislative and social developments after year-end create uncertainty about medium- and long-term economic conditions and potential effects on financial performance.