Mizrahi Tefahot Bank (TASE:MZTF) today reported double-digit net profit growth on higher revenue for the second quarter of 2012. The bank's return on equity rose to an annualized 15.4% for the second quarter from 15.2% for the corresponding quarter.
Revenue rose to NIS 1.2 billion for the second quarter from NIS 1.14 billion for the corresponding quarter of 2011, and financing income rose 11% to NIS 882 million from NIS 793 million. Net profit rose 17.1% to NIS 295 million (NIS 1.29 per share) for the second quarter from NIS 252 million for the corresponding quarter.
As Israel's largest mortgage bank, Mizrahi Tefahot's total mortgages rose 10% to NIS 70.1 billion at the end of June from NIS 63.5 billion a year earlier.
Provision for credit losses fell to NIS 45 million (an annualized 0.15% of the portfolio) for the second quarter from NIS 90 million (0.29% of the portfolio) for the corresponding quarter. Interest income net of the provision for credit losses rose 17.4% to NIS 837 million for the second quarter from NIS 713 million for the corresponding quarter.
Although the capital adequacy ratio fell to 12.93% for the second quarter from 13.61% for the corresponding quarter, the tier-1 capital adequacy ratio rose to 8.03% from 7.71%.
Deposits from the public rose to NIS 122.3 billion at the end of June from NIS 111.5 billion a year earlier, and credit to the public rose to 123.4 billion from NIS 112.4 billion.
Mizrahi Tefahot Bank CEO Eli Yones said, "The bank's success in getting on track to achieve the return on equity target of 15% under the current strategic plan is the reason for the bringing forward the launch of the new strategic plan."
Under the new plan, announced on July 23, the bank aims to reach a return on equity of 17% by 2017, by achieving 8% annual growth and keeping expenses growth at 4.5% a year.
Mizrahi Tefahot Bank's share price rose 0.9% by midday, after publishing the financial report, to NIS 30.51, giving a market cap of NIS 6.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2012
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