Leumi Reports Q4 and 2020 Annual Results: Loan Portfolio Grows in 2020: Corporate

TEL AVIV, Israel, March 9, 2021 /PRNewswire/ —

• Net income in 2020 totaled NIS 2,102 million ($654 million), compared to NIS 3,522 million ($1,096 million) in the same period last year. The decrease in net income stems mainly from the significant increase in loan loss expenses, which arose primarily from an increase in the collective loan loss provision, and from a decrease in non-interest finance income, which last year included gains on the sale of Leumi Card in the amount of NIS 314 million ($98 million).
• Net income in the fourth quarter of 2020 was NIS 890 million ($277 million), compared to NIS 742 million ($231 million) in the same period last year.
• Return on equity in the fourth quarter of 2020 was 9.8%, compared with 8.7% in the same period last year (despite the 0.37% loan loss expense rate in the fourth quarter of 2020, compared with 0.22% in the same period last year).
  The loan loss expense rate in the fourth quarter of the year was significantly lower than the expense rate in the third quarter of the year – 0.76%, and 1.2% in the first half of the year.
• Return on equity for 2020 was 5.7%, compared to 9.8% in 2019 (9.2% net of the effect of the sale of Leumi Card last year), mainly due to an increase in the loan loss expense on the back of the coronavirus crisis.
  The loan loss expense in 2020 amounted to NIS 2.6 billion ($809 million), compared to NIS 609 million ($189 million) last year. Approximately 74% of the loan loss expense stems from an increase in the collective provision on the back of the coronavirus crisis. The loan loss expense rate for 2020 was 0.88%, compared with 0.22% last year. 
• Non-interest finance income in 2020 totaled NIS 1,026 million ($319 million), compared to NIS 1,686 million ($524 million) last year. Net of the gains from the sale of Leumi Card, non-interest finance income last year was NIS 1,372 million ($427 million). The change stems mainly from losses recorded in the item in the first quarter of the year on the back of decreases in capital markets, and from the effect of derivatives and exchange rate differentials.
• The efficiency ratio in 2020 improved to 53.8%, compared with 58.1% last year (net of the effect of the sale of Leumi Card). The improvement stems from a decrease in salary expenses and other operating expenses. 
  Operating and other expenses in 2020 reached NIS 7 billion ($2.2 billion), a 10.9% decrease compared to the same period last year. Salary and related expenses were down 13.5%, mostly due to the lack of provisions for bonuses in light of the financial results, and a decrease in the number of employees.
  The efficiency ratio in the fourth quarter of 2020 was 50.7%, compared with 61.7% in the same period last year.
• Significantly higher CET1 capital ratio than the regulatory requirement – Common Equity Tier 1 capital ratio as at December 31, 2020 was 11.9%, and total capital ratio was 15.6%.
• Growth in the loan portfolio – the Bank continues to focus its growth efforts on the loan portfolio in the middle-market, corporate, and mortgage segments. The corporate loan portfolio (including real estate) grew at a rate of 10.7% in the past year; the middle-market portfolio grew by 9.8% and the mortgage portfolio grew by 6.9%.
• Deposits by the public were up by 19.6% year-on-year, totaling NIS 447 billion ($139 billion), compared to NIS 374 billion ($116 billion) last year.

Leumi Supports its Customers During the Coronavirus Crisis:

• Credit to businesses – Since the outbreak of the crisis, until shortly before the publication date of the financial report, Leumi (TASE: LUMI) approved some NIS 6.4 billion ($2.0 billion) in business loans as part of the state-backed loan fund for businesses hurt by the coronavirus crisis and the loan fund for high-risk businesses. Out of this amount, some NIS 3.8 billion ($1.2 billion) were extended to small businesses.
• Moratorium on loans to small and micro-businesses – as of January 31, 2021, Leumi deferred…