Overview
Mizrahi Tefahot Bank Ltd., ("Mizrahi Tefahot") is incorporated and existing under the laws of the State of Israel and was established as a public company limited by shares on June 6, 1923. In 1963, Mizrahi Tefahot's shares were first listed for trading on the Tel-Aviv Stock Exchange.
Mizrahi Tefahot is Israel's third largest bank based on value of assets and offers a complete range of international, commercial, domestic and personal banking services. Its total assets as of December 31, 2024 amounted to USD 133.16 billion, and for the year ended December 31, 2024, Mizrahi Tefahot reported USD 2462.3 million of operating profit before taxes, USD 1495.75 million of net profit, and a return on equity of 18.5%.
Mizrahi Tefahot's controlling shareholders, the Ofer and Wertheim groups, currently hold about 41.41% of its shares, with the remaining outstanding shares owned by the public who hold shares on the Tel-Aviv Stock Exchange. As of December 31, 2024, Mizrahi Tefahot Group operates through 205 branches and business centres in Israel (including 55 branches of its subsidiary, Bank Yahav for Government Employees Ltd), and two foreign branches in London and Los Angeles.
On October 7, 2023 the Iron Swords war was declared following a sudden murderous rampage into settlements close to the Gaza Strip border. This was concurrently with the start of military escalation on the Northern border.
On October 9, 2024, S&P GLOBAL RATINGS MAALOT LTD (hereinafter: "Maalot") approved the Bank's issuer rating of ilAAA/Negative Outlook. Contingent subordinated notes with contractual loss-absorption provisions (CoCo), which qualify as Tier II equity in conformity with provisions of Basel III, are rated ilAA- by Maalot.
On August 5, 2024, Midroog Ltd. (created in partnership with Moody's International, which owns a 51% equity stake) (hereinafter: "Midroog") left the Bank's ratings unchanged. Long-term deposits and senior debt of the Bank are rated Aaa.il / Stable outlook. Contingent subordinated notes with contractual loss-absorption provisions (CoCo), which qualify as Tier II equity in conformity with provisions of Basel III, are rated Aa3.il(hyb)/Stable outlook.
In recent months, all three international rating agencies downgraded the State of Israel’s credit rating, which, in turn, led to the downgrading of the Bank’s credit rating:
On October 9, 2024, rating agency S&P Global Ratings (hereinafter: "S&P") downgraded the long-term issuer credit rating from A- to BBB+. The agency ratified the Bank’s short-term issuer credit rating of A-2. Negative rating outlook. In addition, the agency rated the contingent subordinated notes with loss-absorption provisions, which qualify as Tier II equity, at BBB-. This series was issued by the Bank on April 7, 2021 by international private placement to institutional investors.
On November 13, 2024, the rating agency Fitch Ratings (hereinafter - "Fitch") affirmed the Bank’s Long-Term Issuer Default Rating (IDR) at A- with a negative outlook and Short Term IDR at F1. The rating of the CoCo notes, which include a loss absorption mechanism, is BBB.
On October 1, 2024, Moody's rating agency (hereinafter: "Moody’s") downgraded the Bank’s long-term deposit rating from A3 to Baa1. Negative rating outlook. The agency ratified the Bank’s short-term deposit rating of P-2.
The current rating of the State of Israel is as follows:
S&P rates the State of Israel at a rating of A (Negative Outlook).
Fitch rates the State of Israel at a rating of A (Negative Outlook).
Moody’s rates the State of Israel at a rating of Baa1 (Negative Outlook).
