Israel’s Bank Leumi Q2 profit jumps, buys back shares

JERUSALEM, Aug 15 (Reuters) – Bank Leumi (LUMI.TA), Israel’s largest lender, reported a 23% rise in second-quarter net profit, boosted by higher financing income due to a sharp rise in interest rates.

Leumi on Tuesday said it earned 2.45 billion shekels ($654 million) in the April-June quarter, up from 2.0 billion a year earlier. Its return on equity reached 19.4%.

Leumi said it would pay a dividend of 736 million shekels, or 30% of its net profit.

The bank also bought 300 million shekels of its own shares as part of a plan to buy back 800 million shekels this year. Together, the dividend to shareholders equals around 40% of profit.

Helped by aggressive Bank of Israel rate hikes to fight inflation, net interest income jumped 37.1% to 4.3 billion shekels.

Its provision to protect against credit losses rose to 318 million shekels from 126 million a year earlier.

Leumi’s Tier 1 ratio of capital to risk components, a key measure of financial strength, stood at 11.23%, steady from the first quarter.

($1 = 3.7472 shekels)

Reporting by Steven Scheer; editing by Jason Neely

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