FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Overview 31/12/15
FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Main events in the last year - Efficiency
processes
UBANK
merging
The merger of UBANK ended successfully on 30/9/15, while maintaining the brand
name – a leading brand in private banking
PAGI
merging
The merger of PAGI ended successfully on 31/12/15, while maintaining the brand
name – a leading brand in ultra-orthodox sector
Improving the group synergy on the revenue side
Dealing with regulatory barriers related to the activities of small banks
Reducing employees in the headquarters
Reducing group’s real estate space (about 1,400 SF)
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Main events in the last year –Efficiency processes
 7% decrease in operating and other expenses ,despite merger related
expenses (excluding the effects of Leumi salaries agreement and the expenses related
7%
Decrease
in
Expenses
Regional HQ




151 million NIS decrease in salaries, effected by a salary decrease in
Leumi salaries agreement (72 million NIS) that was partly offset with onetime expense of 25 million NIS for the UBANK merger.
5.2% decrease in number of employees during 2015
Decrease in other expenses as well: maintenance and depreciation and
other expenses as a result of real estate reduction processes in the group.
 Regional HQ (3 regions) integration to the retail division HQ in the beginning
Integration
of 2016

Continued efficiency processes in branch deployment:
 Closure\merger of branches and savings in branch area –reduction of 7
branches in the group (4 last year)
 Cancellation of Cashier's positions in some of the group branches and
improve efficiency processes in branches

An agreement was signed with the bank employees union in which the
employees commit to three years of “peace”
Branch
Deployment
Efficiency
Labor
Dispute
Termination
to the merger of UBANK – a decrease of 4.5%).
202 million NIS decrease in bank expenses:
3
FIBI
Credit
Growth
Continued
Growth in
Clients’
Assets
OTSAR
HAHAYAL
wins the
ministry of
defense
tender
FIRST INTERNATIONAL
BANK OF ISRAEL
Main events in the last year – Growth
Growth in main activities of FIBI’s Group:
 8% increase in credit to retail customers (excluding mortgages)
 Continued growth in mortgages – 10% increase
 3% increase in commercial (Middle Market) credit
 In the 4th quarter, continued growth in all customer segments. 10% growth in
corporate credit.
 30 Billion NIS growth (9%) in client’s assets portfolio to a total of 359 Billion
NIS (average balance).

Winning the tender for banking and loan services to the Israeli security forces.
winning in this long term tender enables:
 Continued growth for OTSAR HA-HAYAL
 Establishing leadership in this growing customer segment
 Realization of efficiency measures and improvement in credit profitability
in comparison with the pervious tender (interest adjustment).
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Main events in the last year – Financial
stability
 Increase in equity capital ratio (tier 1) 9.81% vs. a ratio of 9.69% in 2014.
Equity Capital
(tier 1) Ratio
Liquidity
Coverage Ratio
Maintaining
credit
portfolio
quality and
diversification

The highest equity capital tier 1 ratio in the Israeli financial system (5 big
groups).
4% increase in equity this year. The bank distributed 130 Million NIS on
2015 (2.6% dividend yield).
 Average liquidity coverage ratio in Q4/15 was 104% vs. 99% in previous
quarter.



Expenses for credit losses of 0.02% in 2015 vs. 0.13% in 2014.
Provision for credit losses to impaired credit (including mortgages) rate of
107.9%, 93.5% (excluding mortgages).
22% decrease in credit risk due to problematic debt.
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Net Profit and ROE (Millions NIS)
Non-recurring events effecting on ROE in Q3/15
effect on ROE (1.8%-)
ROE
After
taxes
ZEEVI lawsuit provision
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One time expenses due to merging of UBANK
Average
capital
Common Equity
capital (tier 1) to
risk weighted
assets ratio
**
6,910
6,668
9.81%
9.69%
7,048
6,989
9
6,797
* Goodwill amortization amounts to 44 Million NIS and decreases ROE by 0.65% .
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Statements of Income 2015 –2014
(Millions NIS(
2015
2014
Gross
change
Change
in %
2,102
2,331
(229)
(10%)
18
89
(71)
(80%)
2,084
2,242
(158)
(7%)
1,378
1,375
3
-
14
62
(48)
(78%)
3,476
2,710
1,629
428
131
522
446
6.5%
3,679
2,912
1,780
444
139
549
455
6.8%
(203)
(202)
(151)
(16)
(8)
(27)
(9)
(6%)
(7%)
(8%)
(4%)
(5%)
(5%)
(2%)
Bank of Israel Average Interest Rate
0.13%
0.60%
Equity Capital (tier 1) to risk components ratio (end of period)
9.81%
9.69%
Efficiency Ratio (Total Operating Expenses to Total
Income)
77.6%
77.3%
Interest Income and Non-Interest Financing Income (including the
effect of “ZE’EVI” lawsuit - 37 million NIS)
Expenses from Credit Losses (0.02% in 2015)
Interest Income and Non-Interest Financing Income after Expenses
from Credit Losses
Commissions
Other income (last year includes the sale of FIBI LONDON and
real estate)
Total Income after Expenses from Credit Losses
Total Operating and Other Expenses
Salaries and Related Expenses
Maintenance and Depreciation of Property and Equipment
Amortization and Impairment of Intangible Assets
Other Expenses
Net Profit
ROE
(0.47%)
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Main Changes in Net Profit
2015 - 2014 (Millions NIS(
Main Positive Influences
Decrease in Salaries and Related
expenses (excluding compensation
provision for the merger of U-Bank and Leumi
agreement)
Decrease in Salaries due to Leumi
Agreement
Decrease in Expenses from Credit
Losses
Increase in the Reconciliations in
Fair Value of Derivative
Instruments
Decrease in Operating and Other
Expenses (excluding Salaries)
Increase in Capital Markets
Commissions
Gross Change
‫חיוביות‬
‫השפעות‬Net Change
2015
2014
(1,676)
(1,749)
73
46
72
(31)
103
64
(18)
(89)
71
40
19
2
17
10
)1,077(
)1,132(
55
37
642
639
3
2
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Main Changes in Net Profit
2015 - 2014 (Millions NIS(
2015
2014 ‫שליליות‬
Gross‫השפעות‬
Change Net Change
1,977
2,078
(101)
(63)
Decrease in Profit Realized from Bonds and
Equity Portfolios
143
257
(114)
(71)
Outcome due to “ZE’EAVI” Lawsuit
(37)
-
(37)
(23)
Capital Gain from the Sale of FIBI London
-
31
(31)
(26)
Expenses related to the merger of U-Bank
(30)
-
(30)
(19)
14
31
(17)
(10)
Main Negative Influences
Decrease in Net Interest Income
Decrease in profit from selling buildings and
others
Total Decrease of 9 million NIS in Net Profit
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Operating & Other Expenses
(Millions NIS)
2015
2014
*
* Includes amortization of goodwill in 2015 in respect of subsidiaries in the amount of NIS 44 million (0.65%
ROE), of which 34 NIS millions expected to be completed until 8/16 (effect of 0.5% on ROE).
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
FIBI Strategic Assets & Liabilities Structure
(NIS Billions)
Capital to Risk
Assets Total
Ratio
31.12.15
31.12.14
13.26%
14.24%
equity capital
(tier 1) to risk
components
ratio
9.81%
Deposits to
Credit Ratio
142.3%
FIBI Strategic Assets & Liabilities composite (*)
31.12.15 (NIS Billions)
Credit to the Public
9.69%
Public
Deposits
72.6
103.3
138.0%
State of Israel Bonds 8.4
Liquid Assets
to Deposits
Ratio
42.0%
Capital
Available for
Investments to
Investment
Capital Ratio
34.1%
Liquidity Ratio
(LCR)
40.2%
31.5%
Gov. & Bank deposits
2.1
Capital Notes 5.9
Bank of Israel Deposits 27.1
Corporate and banks Bonds
(foreign & Israel currency) 3.6
104%
(*) For iIllustration only – not to scale
Capital Available for
Investment 5.4
Bonds of foreign countries 3.9
Structures, Hedge Funds
&Stocks 0.3
Market Risk in VAR(0.01)
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Equity Capital (tier 1) Ratio- Capital Adequacy
Equity capital (tier 1) ratio target at 31/12/17
*
10.75%
10.50%
9.15%
9.8%
9.26%
*
14.30%
14.57%
13.42%
*
The highest equity capital (tier 1) ratio in the banking system
The data is updated to 31/12/15.
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Leverage ratio at
31/12/15 is 5.43%
The Development in Balance Sheet, Equity,
Credit and Deposits - consolidated, end of
period (Billions NIS(
Balance
sheet
Capital attributed to the
shareholders of the Bank
Deposits from the Credit to the
public
public
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Credit to the Public by Segment
(Millions NIS)
Rates of Change Rates of Change
31/12/15
compared to
compared to
30/9/15
31/12/14
Private Clients
(excluding mortgage)
18,489
2.5%
7.9%
Mortgages
20,431
1.1%
10.2%
Credit to Private
Clients
38,920
1.7%
9.1%
Corporate
20,302
9.6%
(0.2%)
Commercial and Small
Businesses
13,333
1.8%
3.2%
Total Credit to the
Public
72,555
3.8%
5.3%
31/12/14 – )(
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Decrease of 22% in credit risk due to
Problematic Debt (Millions NIS)
31/12/15
OffBalance Balance-Sheet Sheet
31/12/14
Total
OffBalance- BalanceSheet
Sheet
Gross
Change
Total
Impaired Credit Risk
771
151
922
806
112
918
4
Inferior Credit Risk
220
45
265
484
183
667
)402(
Credit Under Special Supervision Risk
770
262
1,032
1,136
143
1,279
)247(
1,761
458
2,219
2,426
438
2,864
)645(
Total Problematic Credit Risk
Ratio of the provision for credit losses to impaired credit
107.9%
accruing to the public not accruing interest income
NPL coverage ratio
109.6%
15
FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Deposits from the Public Breakdown
by Segment (Millions NIS)
31/12/15
Rates of Change in
Compared to
31/12/14
Total Private Clients
54,222
10.7%
Corporate
33,402
8.6%
)16%(
)52%(
Commercial + Small
Businesses
)32%(
15,638
1.5%
Total
103,262
8.5%
Of which: Positive Current
Account Balance
42,915
26.5%
31/12/14 – )(
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Client Assets Portfolio (Deposits & Securities)
present continued growth (average balances, Billions NIS)
359
329
296
273
continued increase in client assets portfolio. Increase of 30 Billion NIS(9%) compared to 2014.
17
FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
NOSTRO
NIS millions
Change compare to
31/12/15
30/9/15
31/12/14
30/9/15
31/12/14
NIS million
Wage in %
NIS million
Wage in %
NIS million
Wage in %
NIS millions
Government
bond
12,630
77%
10,005
74%
9,085
72%
2,625
3,545
Of witch: Israel
government
bond
8,392
51%
8,029
59%
7,818
62%
363
574
Banks bond
2,271
14%
2,265
17%
2,162
17%
6
109
Corporate
bond
1,278
8%
1,087
8%
996
8%
191
282
stocks
261
2%
248
2%
311
2%
13
(50)
Total equity
16,439
100%
13,605
100%
12,554
100%
2,834
3,885
Negative capital fund available due to available for sale securities on 31/12/15 is 18 NIS millions. As of 22/2/16
20 NIS millions.
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Specialization

Retail Clients

Commercial/
Corporate


Defense Forces
Personnel
Factoring

Retail Clients

Teachers Sector

Israeli-Arab Sector

Ultra-Orthodox
Sector
Subsidiaries Net Profit
Net
profit
2015
Millions
NIS
ROE
Equity
Capital
(tier 1) to
Risk
Componen
ts Ratio
65.6
5.8%
9.6%
36.5
7.1%
*)10.2%(
13.8%
39.4
10.6%
*)13.6%(
12.3%
Growth Centers
• Winning the tender of the Ministry of
Defense for the provision of loans
and banking services to entitled
customers in the coming years
• Expansion of the factoring activity
• Joining the Fund in cooperation with
the Manufacturers Association together with FIBI
• Winning the government tender for
the provision of loans to SME
together with institutional partner
• Winning in the teachers loans tender
during 2014
• Growth in the teachers sector due to
winning the tender
• Growth in the Israeli-Arab sector (6
branches)
• Increasing network coverage in the
Merged into FIBI
ultra-orthodox sector
On 31/12/15 while
maintaining the
brand name
* ROE in accordance to average Equity capital (tier 1) to risk components ratio in the Israeli banking system
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
Main characteristics and strengths of FIBI group
√ Diversified growing high quality credit portfolio
Level of credit loss provisions is low over the years
Expenses for credit losses of 0.02% in 2015.
22% decrease in credit risk due to problematic debt
√ Consistent growth in client assets portfolio as a result of our strength in
private banking and capital markets activity.
In 2015, 9% growth in client assets portfolio to 360 Billion NIS.
√ High financial stability high equity capital and liquidity ratios
Equity capital ratio (tier1) 9.81% (higher than the regulatory requirement)
Liquidity coverage ratio 104%
√ Tight expenses control and reduction to improve operational efficiency
In 2015, a 202 Million NIS decrease in operating expenses (7% of total
expenses)
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FIBI
6.0%
FIRST INTERNATIONAL
BANK OF ISRAEL
(*)
Dividend policy
Distribution of up to 50% of net profit
5.7%
FIBI
MIZRAHI
POALIM
5.0%
4.0%
3.5%
3.0%
2.6%
2.1%
1.8%
2.0%
1.1%
1.0%
0.8%
0.7%
0.0%
0.0%
2013
(*) Dividend yield
2014
2015
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FIBI
FIRST INTERNATIONAL
BANK OF ISRAEL
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