Mizrahi Tefahot Bank (MZTF) Q1 2022 earnings summary

Executive summary

• Q1 net profit was NIS 1,154m, up 70.7% YoY; excluding NIS 279m in net property-sale gains, profit was NIS 875m and ROE was 16.6%.

• Net loans to the public grew 13.4% YoY to NIS 282.9bn, reflecting accelerated credit growth across retail and business activities.

Financial highlights

• Total revenue was NIS 3,213m, up 32.6% YoY; net interest revenue rose 26.8% to NIS 2,144m.

• Financing revenue before credit-loss expenses increased 20.3% to NIS 2,261m; financing revenue from current operations rose 16.3% to NIS 1,815m.

• Commission revenue increased 9.0% to NIS 520m; other revenue was NIS 432m and included NIS 371m in capital gains.

• Operating and other expenses were NIS 1,388m, up 3.5% YoY; credit-loss expenses were NIS 79m versus NIS 13m in Q1 2021.

Outlook and guidance

• Q1 credit growth was NIS 11.5bn, or 4.2% versus year-end 2021 and 16.9% annualized; management cited growth momentum and rising credit demand as priorities.

• The 2022 GDP growth forecast was 5.5%; the Bank of Israel forecast an average policy rate of 1.5% in Q1 2023, with future rate increases dependent on activity and inflation.

• No Q1 dividend was declared, with capital retained for credit growth amid uncertainty over possible retroactive changes to risk weights.