Bank Leumi Le-Israel Ltd ((IL:LUMI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Bank Leumi Le-Israel Ltd. reflected a generally positive sentiment, underscoring the bank’s strong financial performance. The bank reported substantial profits, effective cost management, and improved credit quality. However, there were minor concerns regarding a decrease in net interest income and potential regulatory changes that could impact future operations.
Strong Financial Performance
Bank Leumi reported a net profit of ILS 2.7 billion and a return on equity (ROE) of 16.3% for the third quarter of 2025. The bank’s cost-to-income ratio was notably strong at 27%, a significant improvement from 31.1% in the same quarter of the previous year. This performance highlights the bank’s effective cost management and income growth.
Robust Dividend and Buyback Program
Following approval from the Bank of Israel, Bank Leumi announced a combined dividend and buyback program totaling ILS 2 billion. This represents 75% of the quarterly net profit, demonstrating the bank’s commitment to returning value to shareholders.
Improved Credit Quality
The bank’s credit quality showed positive developments, with credit loss expenses at just 0.03% of gross loans. The non-performing loan (NPL) ratio was low at 0.41%, and the troubled debt ratio declined to 1.34% of gross loans, indicating a healthier credit environment.
Continued Credit Growth
Bank Leumi’s credit portfolio grew by 1.3% quarter-on-quarter and 8.8% over nine months. This growth was driven by demand from corporates, real estate, infrastructure, mortgages, and the middle market, showcasing the bank’s ability to capitalize on market opportunities.
Strategic Technology Implementation
Nearly 90% of Bank Leumi’s private customers now conduct their activities through digital platforms. This reflects the bank’s successful technology transformation, which has enhanced customer experience and operational efficiency.
Decrease in Net Interest Income
Net interest income decreased by 1.6% year-on-year, influenced by a lower Consumer Price Index (CPI) compared to the third quarter of 2024. This decline is a point of concern for the bank’s future income streams.
Potential Regulatory Risks
There are potential regulatory risks on the horizon, as media headlines suggest an increased tax rate on banks and potential mortgage subsidies by the Finance Minister. These changes could require legislative action and impact the bank’s operations.
Forward-Looking Guidance
During the earnings call, CFO Hagit Argov emphasized the bank’s robust financial performance and strategic focus on leveraging advanced technology. The bank’s strong cost-to-income ratio and credit quality improvements were highlighted as key factors enabling continued growth and enhanced shareholder returns. The bank’s capital and liquidity positions remain strong, with a CET1 ratio of 12.33% and a liquidity coverage ratio (LCR) of 128%.
In summary, Bank Leumi’s earnings call conveyed a positive outlook, driven by strong financial results and strategic initiatives. While there are minor concerns regarding net interest income and regulatory risks, the bank’s robust performance and forward-looking strategies position it well for future growth.