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30/ 09 /201 1 Overview

30/ 09 /201 1 Overview. The Israeli Economy. 2. Growth Rate of GDP 2006-2012*. *FiBi’s Forecast. 3. Bank of Israel Interest Rate * and Rate of Inflation. Bank of Israel Interest Rate. Rate of Inflation. *Bank of Israel Interest. **Fibi’s Forecast. Israel Credit Rating. 5.

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30/ 09 /201 1 Overview

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  1. 30/09/2011Overview

  2. The Israeli Economy 2

  3. Growth Rate of GDP2006-2012* *FiBi’s Forecast 3

  4. Bank of Israel Interest Rate*and Rate of Inflation Bank of Israel Interest Rate Rate of Inflation *Bank of Israel Interest. **Fibi’s Forecast

  5. Israel Credit Rating 5

  6. FIBI Banking Group • Universal bank with strong niche position in capital markets, foreign exchange and foreign trade. • 174 Branches in Israel (including subsidiaries). 6

  7. FIBI’s Strategic Road Map Focus on Retail and PB while Realizing Synergies Realizing Synergies, Restraining Expenses Mergers and Acquisitions Group Branding Merger of mortgage banks Market share in private banking increased Cross selling products within the group Number of retail customers doubled Integration of the banks IT systems No. of branches 2010 2011 2008 2007 2005 2006 2009 2004 2003 7

  8. Capital Markets, Trust & Custody • Private + affluent banking • Since 2004 • Retail/Commercial • Branches: 20 • Since 1977 • Private Banking • Since 1984 Group Structure • Corporate + Middle Market Banking • Private + Affluent banking • Capital & Money Markets • 80 branches • International Affluent Banking Retail BankingCluster • Retail • Branches: 19 • Since 2008 • Retail /Commercial • Branches: 48 • Since 2006 • Commercial / Corporate • Since 1982 8

  9. FIBI’s Rating 9

  10. Ownership Structure Bino-Liberman Group The Public 79.06% FIBI Holding Company Ltd. 20.94% 53% 20.02% Israel Discount Bank 26.45% 75.89% 100% 100% 51% 100% 100% 10 10

  11. Shareholders TheBino family Mr. Zadik Bino is a highly reputable businessman with broad business interests in Israel. In a banking career spanning over 25 years, Mr. Zadik Bino filled senior positions in the local banking sector, which included CEO of Bank Leumi of Israel and Chairman of the Board of Directors and CEO of The First International Bank of Israel. Mr. Zadik Bino was also a member of the Advisers Committee and the Committee for Banking Matters of the Bank of Israel. Since 1989, Mr. Bino has devoted himself to his family's private business interests in Israel and abroad. Through the years, the Bino Group has engaged in the execution, development and nurturing of various investments. Besides banking, the main investments of the Bino family is in Energy (through a 45.5% holding in Paz oil Company Ltd. - a listed company which is Israel’s largest supplier of refined petroleum products, and which owns the Ashdod Refinery). TheLiberman family The Liberman family has enjoyed sustained success in both Australia and Israel for over 50 years. Jack Liberman, an astute Australian businessman and entrepreneur, along with his children, built a large and diversified investment company (JGL Investments PTY Ltd.). The family, together with the Bino Group, in a long-term partnership, hold a controlling interest in both FIBI Holdings and Paz Oil Company Ltd. (“Paz”), Israel’s leading petrol player. 11 11

  12. Financial Reports 30/09/2011 12

  13. Net Operating Earnings and ROENIS Millions 7.5% 7.3% 10.5%- נתונים מצטברים 8.6% 1.5%

  14. The deepening of the crisis in the financial markets has had a substantial effect on the results of the third quarter and the first nine months of 2011

  15. Statements of income 01-09/2011– 01-09/2010NIS Millions 59 15 15

  16. Net interest income before provision for doubtful debts1-9/2011 – 1-9/2010 NIS Millions 16 Excluding interest income charged on problem loans*

  17. Statements of income III/2011– III/2010NIS Millions 17

  18. Income & Assets according to segments Total Income Credit to the public small business2% Deposits from the Public 50% of the revenues arefrom the private and the personal segments

  19. Trends in credit to the public NISMillions Conservative credit policy: __% of the period performanceare are in LTV below __%.

  20. Efficiency Ratio: Operating Expenses to Total Income Adjusted Operating Expenses / Total Income * Operating Expenses / Total Income Operating Expenses Total Income % % Operating Expenses to Total Income 83.4% 78.0% 76.2% 79.8% *Expenses excluding severance pay fund effects, special provisions ; Net interest income excluding gains/losses from sale and writedown of available for sale bonds, hedging of volatility in provision for taxes , interest income charged on problem loans and effect of reconciliations to fair value of ALM derivatives ; Operating income excluding dividend, realization or decline in value of shares and severance pay fund gains;

  21. Operating & Other Expenses (NIS Millions) 1-9/2011 1-9/2010 Total Operating & Other Expenses 21

  22. FIBI Strategic Assets & liabilities structureNIS Millions Deposits from the Public78.9 NIS Billion Credit to the Public64.1 NIS Billion Capital Adequacy Basel II 12.71% Tier 1 Capital Adequacy • 12.1% backed with cash, deposits & state of Israel bonds 8.20% Deposits to Credit Ratio 123.1% State of Israel Bonds: 8.0 NIS Billion Liquid Assets to Deposits Ratio Deposits-Bank of Israel:14.2 NIS Billion Gov. & Bank Deposits 1.5 NIS Billion 32.9% Sovereigns Bonds: 0.7 NIS Billion Deposits in Banks: 3.1 NIS Billion Capital Notes 5.0 NIS Billion Banks Bonds: 1.3 NIS Billion 43.8% NIS+foreign Corporate Bonds:0.8 NIS Billion Capital available for Investments3.9 NIS Billion Of capital available for Investments Structure Products, Hedge Funds & Stocks:0.8 NIS Billion Market Risks in VAR Terms: (0.07)NIS Billion 22

  23. Credit to the public Public Deposits Equity Assets Total Assets, Deposits & CreditNIS Billions NIS Billions $ Billions 26.5 21.3 17.3 1.54 23

  24. Composition of Total Proprietary Trading Book NISMillions NISMillions Government bonds & Secured by Government bonds 77% NIS Millions NISMillions PIIGS Exposure 24

  25. Key Risk Indicators 25

  26. Capital Adequacy Ratio Basel II 4 top Banks in Israel FIBI Core Tier 1 Tier 2 * ** * 14.30% 14.57% 13.42% * * ** 26

  27. Doubtful debts according to the new B.O.I Regulation (NIS millions) * After accounting deductions and before credit lost provision 27

  28. Provision for Doubtful Debts to Credit to the Public Ratio FIBI Other 4 Leading Banks 28

  29. Main Subsidiaries Performance 29

  30. Changes in Net Profit - Subsidiaries NIS Millions 30

  31. Banking Subsidiaries in Israel PAGI, in which FIBI has a 100% equity holding, is a retail bank with 19 branches. the majority of its clients belong to the ultra-orthodox and orthodox sectors. PAGI maintains a unique positioning as Israel’s only orthodox oriented bank and its share in its target is significant. PAGI’s strategy is to aggressively grow its client base, while focusing on target segments in personal, business, and institutional banking. UBANK - FIBI acquired 100% of share capital of UBANK (formerly Investec Bank (Israel) Ltd.) in December 2004. The acquisition of UBANK significantly bolstered FIBI’s competitive position in private banking, capital markets and foreign currency trading. In 2007 UBANK launched an innovation in Israeli banking - dedicated branches for affluent clients. This premium service (above retail and bellow classic private banking) comprises distinctive branch design and hours of operation, along with many other attractive features.

  32. Banking Subsidiaries in Israel OTSAR HAHAYAL - FIBI acquired the majority share of Otsar Hahayal in August, 2006, it now hold 75.89% of the bank. Bank Otsar Hahayal specializes in retail and small to medium-sized businesses (SMEs) and has a high proportion of current and former military and defense industry personnel within its client base. The inclusion of Bank Otsar Hahayal’s operations creates a banking group with a comprehensive and diverse range of activities and earnings. FIBI has completed the process of integrating Otsar Hahayal’s IT systems and is in the process of implementing a shared services model across headquarter functions. MASSAD - FIBI acquired 51% of the share capital of Massad in May 2008. Massad, is a sectorial bank, specializes in teaching personnel. FIBI completed the process of integrating Massad’s IT System and is currently implementing a shared services model across headquarter support functions. Massad's identity as the “teachers' bank” also places it in an advantageous position in the Arab sector, and explains its success in this sector despite rising competition. 32 32

  33. Without derogating from the generality of the conditions of use specified in the First International Bank of Israel ltd. (the “Bank”) website, the content exhibited in this presentation has been prepared by the Bank solely for use of the Bank’s presentation of the quarterly and/or annual Financial reports as well as strategic updates. • The content contained herein is partial and may include information and/or data that have not been independently verified by any outside entity. It is further emphasized that this presentation does not constitute an offer or invitation to purchase any securities and/or investments of any kind whatsoever. • This presentation should not be relied upon in connection with any transaction, contract, commitment or investment. For full and complete overview of the Bank’s financial situation and results of operation please view the Bank’s quarterly and/or annual financial reports. • Neither the Bank nor any of its employees or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss and/or damages of any kind whatsoever arising, directly or indirectly, from any use of the content presented in this file or otherwise arising in connection with this file. • It is hereby emphasized that portions of the information exhibited herein are regarded as forecasts about the future prospects of the Bank and the actual results of the Bank may differ materially from those contemplated taking into account the various risk factors, including but notwithstanding, changes in legislation and governmental supervision policies, changing economic conditions and uncertainties which exist regarding the Bank’s business and the result of various operations. For a more accurate and detailed description see forward looking information section in the Banks financial statements. 33

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