Mizrahi Tefahot Bank (MZTF) Q2 2024 earnings summary

Executive summary

• Q2 net profit was NIS 1.452bn, up 3.9% YoY, with ROE of 19.9%; H1 net profit was NIS 2.724bn, down 1.5% YoY.

• Net public loans reached NIS 337.7bn, up 6.6% YoY, and public deposits reached NIS 373.6bn, up 8.2%.

• Management described credit growth as responsible and said the strategic plan’s main targets had been reached ahead of 2025.

Financial highlights

• Q2 total revenues were NIS 3.835bn, down 4.0% YoY; financing revenues before credit-loss expenses fell 5.4% to NIS 3.246bn.

• Q2 commissions and other revenues were NIS 589m, up 4.4% YoY; operating and other expenses fell 12.7% to NIS 1.328bn.

• Q2 credit-loss expenses were NIS 109m versus NIS 247m YoY; H1 credit-loss expenses were NIS 284m versus NIS 474m.

• H1 total revenues were NIS 7.433bn versus NIS 7.821bn YoY; net interest and non-interest financing revenues fell 5.8% to NIS 6.276bn.

• H1 operating and other expenses fell 11.9% to NIS 2.607bn, including merger synergies and prior-year one-time costs.

Outlook and guidance

• Mortgage demand is improving; management anticipated a stronger H2 2024 recovery, but not to early-2022 levels.

• Responsible credit growth remains the plan; the cost-income ratio target is below 50% by end-2025.

• The Bank of Israel Research Division forecast Israeli GDP growth of 1.5% in 2024; continuing war and regional escalation left the economic outlook uncertain.