Mizrahi Tefahot Bank (MZTF) Q3 2023 earnings summary

Executive summary

• Q3 net profit was NIS 1,098 million, down 6.8% YoY; 9M net profit reached NIS 3,863 million, up 14.1%.

• 9M ROE was 20.3%; Q3 ROE was 16.8%.

• Financing revenue from current operations remained strong; management said the main strategic-plan targets had been reached ahead of 2025.

Financial highlights

• Q3 total revenue was NIS 3,868 million, up 9.5% YoY; financing revenue from current operations was NIS 2,937 million, up 11.8%.

• 9M financing revenue from current operations rose 27% YoY to NIS 9,964 million; net interest revenue was NIS 9,286 million.

• Q3 credit-loss expenses were NIS 694 million versus NIS 155 million a year earlier; operating and other expenses fell 7.5% to NIS 1,415 million.

• At Sep. 30, net loans were NIS 323.6 billion, up 6.4% YoY; public deposits were NIS 351.0 billion and assets totaled NIS 438.3 billion.

Outlook and guidance

• Mortgage demand was expected to remain low in Q4, improve in 2024 but stay below 2022 levels; responsible credit growth remained the plan.

• The strategic-plan cost-income target was below 50% by 2025; Q3 and 9M ratios were already below that threshold.

• War duration and economic effects remained uncertain, with results exposed to changes in growth, unemployment, markets and customer uptake of relief measures.