Israel's Mizrahi Tefahot Bank posts 25% profit jump on higher lending rates
JERUSALEM, Feb 27 (Reuters) - Israeli bank Mizrahi Tefahot (MZTF.TA), opens new tab, the country's third largest, on Thursday reported a 25% jump in quarterly profit, boosted by falling bad loan provisions and higher interest income.
Mizrahi, the first of Israel's largest banks to report for the fourth quarter, said it earned net profit of 1.3 billion shekels ($366 million) in the three months to December 31, up from 1 billion shekels a year earlier.
High interest rates boosted net interest income to 2.8 billion shekels from 2.7 billion shekels and the bank's credit loss provisions slid to 105 million shekels from 295 million shekels a year earlier.
For 2024, net profit grew 11% to 5.5 billion shekels.
The Bank of Israel has increased interest rates sharply since 2022 to battle inflation. This has helped the country's lenders to achieve high profits and raise dividend payouts, prompting public criticism that they are cashing in while dragging their feet on raising savings rates.
Mizrahi Tefahot said it would pay a quarterly dividend of 522 million shekels, or 40% of net profit, lifting 2024 dividends to 2.2 billion shekels.
A day earlier the Bank of Israel asked the nation's banks to put aside 3 billion shekels in 2025 and 2026 to fund relief for retail customers and to improve interest terms offered to clients hurt by Israel's 16-month war against Palestinian militant group Hamas.
Mizrahi noted that it had taken many steps and initiatives to support its clients since the start of the conflict.
"The 2024 financial statements published today leave no room for doubt: despite the many difficulties, we fully met all of our tasks, both the ethical-social ones and the business ones, and we take pride in that," said CEO Moshe Lari.
The bank's common equity Tier-1 capital ratio - a gauge of financial strength - rose to 10.40% in December, up 8 basis points year on year and above the regulatory minimum of 10.23%.
($1 = 3.5488 shekels)
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