Written by: Aaron Katsman | March 31, 2009
While most global banks are losing more money than anyone could ever dream of, the Israeli Bank Mizrahi Tefahot, keep chugging along making money.
According to Globes: “Mizrahi Tefahot Bank (TASE:MZTF) today published its financial report for the fourth quarter and full year of 2008. Israel’s fourth largest bank posted a net operating profit of NIS 601 million for the year, 11.7% less than the NIS 681 million in 2007, but nonetheless more than the aggregate full-year profit of all of Israel’s banks.”
Commenting on the results Chairman Jacob Perry said, “Our results justify the superlatives said about us over the past year. We are pleased.”
Written by: Aaron Katsman | March 13, 2009
In another signal that the Israeli economy is falling further into the abyss, Moody’s has cut the ratings of 4 Israeli banks. Interesting to note that Bank Mizrahi Tefahot did not get cut, as they continue to implement their conservative business model, which has kept them both profitable and out of much of the financial crisis.
According to Globes: “International ratings company Moody’s has cut its ratings for four Israeli banks: Bank Leumi (TASE: LUMI), Bank Hapoalim (LSE: BKHD; TASE: POLI), First International Bank of Israel (TASE: FTIN1;FTIN5), and Israel Discount Bank (TASE: DSCT). Moody’s has downgraded the long-term local currency deposit rating of Bank Leumi to A1 from Aa3. The Baseline Credit Assessment (BCA) was lowered to Baa1 from A3 and the bank financial strength rating (BFSR) was downgraded to C- from C. The bank’s A1 long-term foreign currency deposit rating and Prime-1 short-term deposit ratings were affirmed. The outlook on both the long-term local and foreign currency deposit ratings and on the BCA is negative, while the outlook on BFSR is stable.”
The resons cited for the downgrades were familiar. A slowing economy, bank exposure to construction and tourism which are both in trouble and lower profitability.
Let’s see if PM elect Benjamin Netanyahu, can turn things around quickly so that Israel can get a credit upgrade.
Written by: Aaron Katsman | February 8, 2009
With hysteria running wild about paying anyone associated with the financial services industry a bonus, news that Israel’s best run and profitable bank, Mizrahi Tefahot, is looking to pay bonuses is big news. With countries looking to implement US Prez. Obama’s call for salary limits and no bonuses, Mizrahi Tefahot is bucking the trend. For good measure. Why shouldn’t employees who contribute to a successful and profitable business be rewarded for their hard work?
According to Globes: “Mizrahi Tefahot Bank is the only bank considering paying employee bonuses for 2008. Its return on equity in January-September was 12.1%, the highest in the banking system. Its profit was down just 4.3%, compared with the corresponding period of 2007, and compared with an 82% drop in the aggregate profits of the other banks. A knowledgeable source said that, given Mizrahi Tefahot Bank’s strong results, “it cannot be ruled out that its board will approve the payment of employee bonuses.”
It seems crazy to me that a bank in such a terrible climate has been run so well, and will not pay out bonuses. If quality management will not be compensated for their good work, why should they stay in their position? Who wants to be CEO if you aren’t going to make any money.
The board of Mizrahi Tefahot should approve the bonuses at once.
