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 September 30, 2023 amounted to USD 114.61 billion, and for the nine months ended September 30, 2023, Mizrahi-Tefahot reported USD 1,607.74 million of operating profit before taxes, USD 1,010.2 million of net profit, and a return on equity of 20.3%.
Mizrahi-Tefahot's controlling shareholders, the Ofer and Wertheim groups, currently hold about 41.49% 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, 2022, Mizrahi-Tefahot Group operates through 204 branches and business centres in Israel (including 53 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 31, 2023, S&P Global Ratings Maalot Ltd. (hereinafter: "Ma'alot") revised the Bank's rating outlook from Stable to Negative. At the same time, the agency confirmed the Bank's issuer rating of ilAAA. The change in the Bank's rating outlook is further to the change in rating outlook of the State of Israel, due to the war, reflecting the probability of this war having a material negative effect on the Israeli economy. 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 1, 2023, Midroog Ltd. (created in partnership with Moody's International, which owns a 51% equity stake) (hereinafter: "Midroog") left the Bank's ratings un-changed. 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 / Stable outlook.
On October 24, 2023, rating agency Moody's Investors Service placed the rating of the Bank's long-term deposits under review for rating downgrade, further to review of Israel's debt rating. The deposits are currently rated A2.
On October 31, 2023, rating agency S&P Global Ratings (hereinafter: "S&P") lowered the Bank's rating outlook from Stable to Negative. At the same time, the agency confirmed the long-term issuer credit rating of A- and the short-term issuer credit rating of A-2. Moreover, the agency confirmed the BBB- rating of contingent subordinated notes with loss-absorption provisions which qualify as Tier II equity, issued by the Bank on April 7, 2021 by international private placement to institutional investors.
On October 19, 2023, rating agency Fitch Ratings (hereinafter: "Fitch") placed the Bank's rating under Negative Watchlist, further to similar action taking with regard to Israel's debt rating. The Bank's long-term IDR is A, and the Bank's short-term IDR is F1+. The rating of CoCo notes is BBB.
