Israel’s Bank Leumi (BLMIF) has delivered a robust set of numbers for the first quarter of 2022. Net interest income jumped to $913 million from $704 million a year ago. Leumi is maintaining a focus on growing its credit portfolio in the Corporate, Commercial, and Mortgage segments.
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During the quarter, its Credit portfolio increased by 7.6% from the year-ago period. Corporate, Commercial, and Mortgage portfolios registered a growth of 11.2%, 9.7%, and 4.2%, respectively.
Moreover, Leumi continues to deliver on key performance ratios. In Q1, return on equity was 15.6% along with an efficiency ratio of 46.6%.
Recent Developments
In April, Leumi USA completed a merger with Valley National Bank. Consequently, Leumi will record an income of $203 million net of tax. Of this amount, $61 million has been recorded in Q1 and the remaining amount will be recorded in Q2.
Additionally, to prepare for a transition to Lod in 2023, Leumi has sold one of its headquarters buildings in Tel Aviv. The transaction is expected to garner a pre-tax gain of $165 million for Leumi. The gain will be recorded in 2023.
Finally, Leumi is maintaining robust numbers heading into Q2. At the end of March, its net loans to the public were $110 billion, compared to $91 billion a year ago. This 20.7% increase was attributed to an increase in mortgage, middle-market and corporate loans. During this period, deposits by the public increased 18.3% to $163 billion.
Hedge Funds Lap Up BLMIF
TipRanks data shows while the hedge fund confidence signal in Leumi remains neutral, funds have increased their holding in the bank by 9,900 shares in the last quarter.
Closing Note
Leumi has delivered a resounding Q1 performance. This growth further builds upon the bank’s top-line growth so far. Revenue increased by 63% in 2021. Furthermore, the recent merger should further propel the stock price, which is up 20% in the past six months compared to the 14.2% drop in the S&P 500.
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