Bank Leumi, headed by Hanan Friedman, recorded the largest net profit in its history, totaling NIS 9.8 billion, in 2024, a sharp jump of 40% in comparison with the previous year. As rival bank Hapoalim did on Monday, Bank Leumi also presented its goals for the next two years this morning. The bank estimates that it will record a net profit of NIS 9-11 billion each year in 2025 and 2026. Return on equity is expected to be 15-16%.
For 2024, the bank recorded a return on equity of 16.9%, a significant improvement on the return of 13.7% in 2023, which was affected by the provisions ordered by the Bank of Israel after the outbreak of the war.
The bank's goals also include distributing 50% of its profits to shareholders in the next two years, a higher rate than has been allowed up to now by Supervisor of Banks Daniel Hahiashvili (40%). The bank estimates that its credit portfolio will grow by 8-10% in the next two years.
Interest income NIS 16.5 billion
Bank Leumi's interest income amounted to NIS 16.5 billion last year, representing an increase of 3.2% in comparison with the previous year. The bank recorded a sharp 70% decrease in credit losses last year – these amounted to NIS 713 million. It should be emphasized that the losses recorded a year earlier, in 2023, were high due to group provisions that the Bank of Israel instructed the banks to make, after the outbreak of the war. These also eroded net profit in 2023.
One of the encouraging figures emerging from the reports is that, last year, provisions for credit losses amounted to a low 0.16% of the average balance of credit to the public, down from 0.58% in 2023 (which was high due to the war). Behind this figure is another important sign for the economy: the provision for credit losses last year was entirely a group provision, that is, not for specific businesses in difficulties, but a conservative measure designed to protect the bank from future shocks. The bank explained that its provision "continues to reflect a conservative approach in the light of the security and economic uncertainty."
Leumi plans to distribute a dividend of NIS 980 million in respect of its fourth-quarter profit. This will be in the form of a direct transfer to shareholders of NIS 706 million, with the remaining amount applied to a share buyback program. The dividend amounts to 40% of the net profit of the country's largest bank. Leumi’s total dividend for 2024 is NIS 4 billion.
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Credit to the public (net) stood at NIS 455.5 billion at the end of last year, representing an increase of 8.6% over the year. The sector that grew fastest was home loans (mortgages), which reached NIS 146.6 billion, representing a sharp increase of 11% in one year.
Published by Globes, Israel business news – en.globes.co.il – on March 4, 2025.
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