Leumi reports high credit growth, improving efficiency

The surtax imposed on the banks by the Ministry of Finance reduced Bank Leumi’s first quarter profit by only 2%, to NIS 2.4 billion. Net interest income fell by 3% to NIS 4 billion in comparison with the corresponding quarter. Annualized return on equity in the quarter was 13.6%, or 15.1% if the surtax is discounted. Bank Leumi is headed by Hanan Friedman.

The percentage decline in Bank Leumi’s profit as a result of the surtax is substantially less than at Bank Hapoalim, Discount Bank, and First International Bank.

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Bank Leumi’s efficiency ratio (operating expenses:net revenue) continued to improve, and looks as though it will again be the best among Israel’s banks. It fell to 29%, which compares with 32.1% in the corresponding quarter. “Leumi’s efficiency ratio remains the best in Israel and among the best in the world over time, among other things thanks to well-thought out implementation of the bank’s strategy of leadership in AI in recent years.”

The bank will distribute a dividend of NIS 1.3 billion partly in cash and partly in the form of repurchase of its shares. The dividend represents 55% of the bank’s net profit.

Bank Leumi reported that non-performing loans represented 0.4% of its credit portfolio. The credit loss expense grew by 200% in the first quarter to NIS 166 million. This is 0.12% of the average balance of credit to the public, which compares with 0.05% in the corresponding quarter. The bank stressed that the expense consisted entirely of a general provision, not linked to specific loans, and that it was mostly made out of prudence as the credit portfolio expanded. On specific provisions, the bank recorded income, that is net recoveries, in the quarter.

Year-on-year, total credit to the public rose by 18.4% to NIS 547.8 billion at the end of the first quarter. The corporate credit segment grew by 27.5%.

Published by Globes, Israel business news – en.globes.co.il – on May 19, 2026.

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