Bank Leumi reports 29.8% increase in 3rd-quarter profits

Bank Leumi, one of Israel’s two largest lenders, reports a 29.8 percent increase in net profit in the July to September quarter as it cashes in on high interest rates paid by mortgage and loan holders.

Leumi’s profit of NIS 2.3 billion ($617 million) in the third quarter is up from NIS 1.8 billion ($482 million) during the same period last year. Net interest income increases by 4.5% to NIS 4.5 billion ($1.2 billion) in the quarter compared with NIS 3.9 billion ($1.04 billion) a year ago.

The country’s banks have come under fire for being slow in passing on higher Bank of Israel interest rate increases to savings accounts, while fully profiting from the fruits of elevated borrowing costs on loans and mortgages. Meanwhile, households and businesses have been struggling to make repayments and the cost of living continues to rise during the ongoing war with the Hamas terror group.

Yesterday saw two other banks, Hapoalim Bank and Israel Discount Bank, also post high profits for the same period amid high interest rates.

Leumi’s loan portfolio in the third quarter grows by 7.1% compared with the corresponding period last year. In the first nine months of 2024, the loan portfolio increases by 6.5%. Deposits by the public rise by 8% in the third quarter compared with the same quarter last year.

Leumi says it will pay a quarterly dividend of 40% of net profit to shareholders, out of which NIS 688 million ($185 million) is a cash dividend and the remainder will be paid out from a share buyback.