FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

Overview 30.09.12

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

2

Net Earnings and ROE NIS Millions

291 NIS Millions

449 NIS Millions

* Assuming core capital ratio of (8.3%), (as the average core capital ratio of the Israeli banking industry at 30/06/2012)

10.1%

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

3

Statements of income 1-9/2012- 1-9/2011 NIS Millions

 1-9/20121-9/2011Gross

changeNet interest income1,6771,60671Expenses (income) with respect to credit loss (0.17% provision rate)

855926

Net interest income after expenses for credit losses1,5921,54745

Total non-interest income1,174995179

Of which: non-interest income (expenses)137(129)266Operating commissions (decrease stems mainly from decreases in customers activity in the capital markets)

1,0151,101(86)

Other Income 2223(1)

Total operating and other expenses2,0782,087(9)Of which: salaries and related expenses (including losses appointed time compensation)

1,2181,20711

Holding and depreciation on buildings and equipment 332336(4)

Amortization and impairment of intangible assets1261188

Other expenses402426(24)

Profit before tax688455233

Provision for taxes on income25319657

Bank’s share of profit of associates3046(16)

Net earnings449291158

ROE10.1%6.9% 

Core capital ratio (end of period)9.33%8.18% 

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

4

Statements of income 7-9/2012- 7-9/2011 NIS Millions

 7-9/20127-9/2011Gross

change

Net interest income57052248

Expenses (income) for credit losses (0.20% provision rate)

3359(26)

Net interest income after expenses for credit losses53746374

Total non-interest income416198218

Of which: non-interest income (expenses)64(165)229

Operating commissions (decrease stems mainly from decreases in customers activity in the capital markets)

335358(23)

Other Income 17512

Total operating and other expenses68265329

Of which: salaries and related expenses (including losses appointed time compensation)

39236032

Holding and depreciation on buildings and equipment 112115(3)

Amortization and impairment of intangible assets42393

Other expenses136139(3)

Profit before tax2718263

Provision for taxes on income106997

Bank’s share of profit of associates516(11)

Net earnings16410154

ROE11.0%0.7% 

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

5

Income from Financing Activities (before Tax) 7-9/2012 - 7-9/2011 NIS Millions

 7-9/20127-9/2011Gross

change

Net interest income57052248

income (expenses) Non-interest64(165)229

Total income from interest and non-interest634357277

Reconciliations to fair value of derivatives 19(60)79

Income from sale and reconciliations to fair value of bonds53449

Earnings investments from shares18117

Provisions for impairment of securities(1)(96)95

Financial expenses arising from hedging investments abroad(6)(10)4

Total income from interest and non-interest-core activities

55147873

Average interest rate in bank of Israel2.25%3.25% 

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

6

Total Income to Total Weighted Risk Assets Ratio

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

7

Operating & Other Expenses NIS Millions

1-6/20121-6/2011

9-

11

8

24-

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

Improving Operational Efficiency Ratio (Consolidated)Total Operating Expenses to Total Income

8

Total Income%

1-9/2011

Total Operating ExpensesTotal Operating Expenses / Total Income

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

Credit tothe Public66.8 NIS Billion

9

FIBI Strategic Assets & Liabilities Structure NIS Millions

Deposits to Credit Ratio

Liquid Assets to Deposits Ratio

Capital Adequacy Basel II

Core Capital Adequacy :Of which

Corporate and Commercial 34.815.4Consumer

16.0 Mortgage

Gov. & Bank Deposits1. 6 NIS Billion

9.33%

126.5%

34.3%

36.1%Of capital available for Investments

State of Israel Bonds: 6.5 NIS Billion

Deposits-Bank of Israel:18.7 NIS Billion

Sovereigns Bonds: 1.2 NIS Billion

Deposits in Banks: 3.5 NIS Billion

Banks Bonds: 1.7 NIS Billion

NIS+foreign Corporate Bonds:0.8 NIS BillionStructure Products, Hedge Funds & Stocks:0.7 NIS Billion

Market Risks in VAR Terms: (0.04) NIS Billion

Capital Notes5.4 NIS Billion

Capital available for Investments4.4 NIS Billion

14.19%

10.02% Credit against liquid assets

Deposits from the Public83.8 NIS Billion

Credit tothe Public66.2 NIS Billion

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

10

Total Assets, Deposits & Credit to the public NIS Millions

Credit to the Public

Public Deposits

EquityAssets

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

11

Credit to the Public by segments

30.9.2012 NIS Millions

 

30.09.12 31.12.1130.09.11

Change in %

Compared to

30.09.11 Total Private + Retail (Households)

31,08028,91228,8557.71%

Of which: Mortgage

15,98914,70214,6229.35%

Commercial + Small Business

13,33513,38713,517-1.35%

Corporate 21,78422,67921,7100.34%

Total Credit to the Public

66,19964,97864,0823.30%

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

12

Provision for Credit Losses to Credit to the Public Ratio

* Since 2011 all collection on Doubtful debts is shown as Expenses for credit losses instead of earnings from financing operations

New measurement according to new B.O.I Regulation*

Other 4 Leading Banks FIBI

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

13

Deposits from the Public by segments

30.09.1231.12.1130.09.11Change in % Compared to

30.09.11

Private Banking

24,06223,57122,5456.73%

Retail (Households)

27,74126,36525,6878.00%

Total Private Deposits

51,80349,93648,2327.40%

Commercial + Small Business

10,36111,13810,428)0.64%(

Corporate21,61020,31320,2066.95%

Total 83,77481,38778,8666.22%

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

14

Composition of Total Proprietary Trading Book NIS Millions

Volume30.09.12

Volume30.06.12

Composition 30.09.12

Composition 30.06.12

Government bonds & Secured by Government bonds

7,3938,53071%74%

State of Israel bonds88%90%

Commercial Banks bonds1,7561,70917%15%

Shares4604654%4%

Other 8288798%7%

Of which: Fx Corporate Bonds

144145

Of which: NIS Corporate Bonds

684735

Total10,43711,583100%100%

NIS Millions

Government bonds & Secured by Government bonds

71%

Total

Spain90

Italy83

Portugal0

Greece0

Ireland0

NIS Millions PIIGS proprietary trading book exposure

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

13.42%

15

Core Capital Ratio 30.09.12- Basel II

****

-1.3

14.30%14.57%

13.42%

*

*

*

***

**

-1.3

-1.7 -1.71

0.77-

1.62-

0.75-

%

-0.7

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

16

Changes in Net Profit - Subsidiaries NIS Millions

1-9/2012Change

Relative to 1-9/2011

ROECore Capital

Ratio

85.336%12.3%8.96%

37.510%11.6%15.9%

3510%13.4%11.7%

32.524%11.2%13.76%

FIBI

FIRST INTERNATIONAL BANK OF ISRAEL

17

Q3 Highlights

11% ROE at the third quarter and 10.1% ratio for the 9 month ended on September 30.

Continued increase in financing revenues from core banking activity.

Continued decrease in capital market operating commissions due to the decline in stock market activity volumes, while maintaining our share in the activity.

Continued decrease in operating expenses (including in expenses related to activity in the capital market).

Increase in revenues from bonds and shares. a relatively large positive movement in the capital reserve.

Improved profitability at subsidiaries.

Core capital ratio: 9.33%, the highest in the banking industry.