FIBI FIRST INTERNATIONAL BANK OF ISRAEL Overview 31/3/16
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Net Profit and ROE (Millions NIS) ROE Average capital Common Equity capital (tier 1) to risk weighted assets ratio 7, 119 9. 92% +4. 2% 6, 833 9. 49% * Goodwill amortization amounts to 11 Million NIS In Q 1/16 (44 Million NIS annually) and decreases ROE by 0. 65%. 2
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Statements of Income I/2016 –I/2015 (Millions NIS) I/2016 I/2015 Gross change Change in % Interest Income and Non-Interest Financing Income 560 519 41 7. 9% (Income)/Expenses from Credit Losses (67) 12 (79) 327 357 (30) (8. 4%) 966 870 96 11. 0% Commissions (Includes 19 Million NIS decrease in capital market commissions) Total Income after (income)/Expenses from Credit Losses) 3
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Statements of Income I/2016 –I/2015 (Millions NIS) I/2016 I/2015 Gross change Change in % 698 649 49 7. 6% 434 448 (14) (3. 1%) - (72) Maintenance of buildings and equipment 79 85 (6) (7. 1%) Depreciation and amortization 27 23 4 17. 4% Other Expenses 127 134 (7) (5. 2%) Profit before taxes 268 221 47 21. 2% Provision for taxes on profit (including 16 Millions nonrecurring expense in Q 1/16) 118 94 24 Net Profit 147 125 22 17. 6% ROE 8. 5% 7. 5% 0. 10% 0. 20% (0. 10%) Total Operating and Other Expenses Salaries and Related Expenses Decrease in Salaries due to Leumi Agreement- Previous year Bank of Israel Average Interest Rate 73. 6% Efficiency Ratio (Total Operating Expenses to Total Income) Efficiency Ratio (excluding the effect of Leumi agreement last year) 77. 6% 81. 8% 4
FIBI Operating & Other Expenses FIRST INTERNATIONAL BANK OF ISRAEL (Millions NIS) Continuing decrease in all operating expenses I/2016 I/2015 (23) -3. 2 % * 14 -3. 1 % 36 - on des n nse (Inclu expe IS ) rring recu millions N of 16 24 *Excluding Leumi agreement affect in Q 1/2015. ** Q 1/16 tax expenses includes non-recurring expense of 16 Million NIS, due to the decrease in the corporate tax rate on deferred tax balances. 5
FIBI FIRST INTERNATIONAL BANK OF ISRAEL The Development in Balance Sheet, Equity, Credit and Deposits - end of period (Billions NIS) Leverage ratio at 31/3/16 is 5. 44% Balance sheet Capital attributed to the shareholders of the Bank Deposits from the Credit to the public +0. 9% +0. 6% +2. 7% +2. 0% 6
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Credit to the Public by Business Segments (Millions NIS) 31/3/16 Rates of Change compared to 31/12/15 Rates of Change compared to 31/3/15 Private Clients (excluding mortgage) 18, 093 0. 9% 8. 8% Mortgages 20, 957 2. 6% 10. 8% Credit to Private Clients 39, 050 1. 8% 9. 9% Corporate 21, 339 3. 4% -1. 7% 31/12/15 – () Commercial and Small Businesses 14, 145 4. 2% 4. 9% Total Credit to the Public 74, 534 2. 7% 5. 4% Credit to private Clients to total credit- 52% 7
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Expenses for Credit Losses to Credit to the Public Ratio FIBI Other 4 leading Banks Includes an Implementation of Bank of Israel directives regarding group provision 8
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Credit risk due to Problematic Debt (Millions NIS) 31/3/16 Gross Change compared to compared 31/12/15 31/3/15 31/12/15 to 31/3/15 Impaired Credit Risk 971 922 910 49 61 Inferior Credit Risk 178 265 240 (87) (62) Credit Under Special Supervision Risk 986 1, 032 1, 585 (46) (599) 2, 135 2, 219 2, 735 (84) (600) Total Problematic Credit Risk Ratio of the provision for credit losses to impaired credit to the public not accruing interest income (NPL coverage ratio) 103. 8% 107. 9% A decrease of 4% in total Problematic Credit Risk in Q 1/16 (22% decrease compared to Q 1/15) 9
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Equity Capital (core tier 1) Ratio- Capital Adequacy Equity capital (core tier 1) ratio target at 31/12/17 10. 75% * 10. 50% 9. 8% 9. 15% 9. 28% * 14. 30% 14. 57% 13. 42% * The data is updated to 31/3/16. 10
FIRST INTERNATIONAL BANK OF ISRAEL FIBI Strategic Assets & Liabilities Structure (NIS Billions) 61. 3. 13 Capital to Risk Assets Total Ratio 51. 21. 13 12. 92% 13. 26% equity capital (tier 1) to risk components ratio 9. 92% Deposits to Credit Ratio 139. 3% Liquid Assets to Deposits Ratio FIBI Strategic Assets & Liabilities composite (*) 31. 3. 16 (NIS Billions) 31. . 16 (NIS Billions) Credit to the Public 9. 81% 74. 5 Public Deposits 103. 9 142. 3% State of Israel Bonds 9. 2 Gov. & Bank deposits 2. 3 41. 1% FIBI Bank of Israel Deposits 26. 5 42. 0% Capital Notes 5. 7 Corporate and banks Bonds (foreign & Israel currency) 1. 1 Liquidity Ratio (LCR) 105% (*) For i. Illustration only – not to scale 104% Capital Available for Investment 5. 6 Bonds of foreign countries 3. 8 Structures, Hedge Funds &Stocks 0. 3 Market Risk in VAR(0. 2) 11
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Main events in the last year – The merger of UBANK & PAGI with FIBI UBANK merging The merger of UBANK ended successfully on 30/9/15, while maintaining the brand name – a leading brand in private banking PAGI merging The merger of PAGI ended successfully on 31/12/15, while maintaining the brand name – a leading brand in ultra-orthodox sector Dealing with regulatory barriers ne Do one D Reducing employees in the headquarters- the main part was done in Q 4/16 following the merger of UBANK ess proc In Improving the group synergy on the revenue side s Following the mergers an increase in client activities with PAGI & ces UBANK clients in Q 1/2016 and is expected to grow on next quarters ro In p ess roc In p ss roce In p Improving the group synergy on branch network Reducing group’s real estate space 12
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Highlights for Q 1/2016 § Group Net Profit in Q 1/16 was 147 Millions NIS compared to 125 Millions NIS in Q 1/15, an increase of 17%. The ROE in Q 1/16 is 8. 5%, compared to 7. 5% in Q 1/15, and 6. 5% in 2015. Goodwill amortization of about 44 Millions NIS detracts about 0. 65% from the ROE. In 2016 an amount of approximately 36 Millions NIS (0. 5% ROE) from the goodwill amortization will end on Q 3/16. The provision for taxes on profit includes a non-recurring expense of 16 Millions NIS regarding corporate tax decline. § Net Profit § § Equity Capital (tier 1) Ratio A 3. 2% decrease in total group expenses compared to Q 1/15 (excluding nonrecurring income regarding leumi Agreement) § Increase in equity capital ratio (tier 1) 9. 92% vs. a ratio of 9. 81% in 12/2015. n n Continuing trend of decrease in the bank expenses, in scale of 23 Million NIS. A reduction in all of the expenses sections. Salary expenses decreased by 14 Million NIS. 13
FIBI Credit Growth and also growth in the client’s investment portfolios Decrease in expenses for credit losses High NPL ratio and decline in problematic credit risk FIRST INTERNATIONAL BANK OF ISRAEL Highlights for Q 1/2016 An annually growth of 5. 4% in credit balances and 2. 7% on Q 1/16. Growth in all customers segments: § 8. 8% annually increase in credit balances to private sector (excluding mortgages loans) § Continuing growth in mortgages – 10. 8% annually increase § 5% annually increase in credit balances to commercial and small business (Middle Market) credit § 1. 7% annually decrease in corporate credit. Increase of 3. 4% in Q 1/16. § An increase of 2 Billion NIS in client’s investment portfolios, Despite the negative trend in the capital markets. n Income from credit losses of 67 Million NIS in Q 1/16 versus an expenses of 12 Millions NIS in Q 1/15. The Income this quarter is primarily a result of a decrease in the expenses for credit losses on a collective basis. § High Ratio of provision for doubtful accounts versus non-performing credit § (including mortgages) 103. 8%. Decrease of 4% in total problematic credit risk in Q 1/16 (22% decrease compared to Q 1/15). 14
FIBI FIRST INTERNATIONAL BANK OF ISRAEL Disclaimer 1. Without derogating from the generality of the conditions of use specified in the First International Bank of Israel Ltd. (the “Bank”) website, the content exhibited in this presentation has been prepared by the Bank solely for use of the Bank’s presentation of the quarterly and/or annual financial reports as well as strategic updates. 2. The content contained herein is partial and may include information and/or data that have not been independently verified by any outside entity. It is further emphasized that this presentation does not constitute an offer or invitation to purchase any securities and/or investments of any kind whatsoever. 3. This presentation should not be relied upon in connection with any transaction, contract, commitment or investment. For full and complete overview of the Bank’s financial situation and results of operation, please view the Bank’s quarterly and/or annual financial reports. 4. Neither the Bank nor any of its employees or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss and/or damages of any kind whatsoever arising, directly or indirectly, from any use of the content presented in this file or otherwise arising in connection with this file. 5. It is hereby emphasized that portions of the information exhibited herein are regarded as forecasts about the future prospects of the Bank and the actual results of the Bank may differ materially from those contemplated taking into account the various risk factors, including but notwithstanding, changes in legislation and governmental supervision policies, changing economic conditions and uncertainties which exist regarding the Bank’s business and the result of various operations. For a more accurate and detailed description see forward looking information section in the Banks financial statements. 15
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