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, 2023 amounted to USD 123.57 billion, and for the year ended December 31, 2023, Mizrahi Tefahot reported USD 2,136.2 million of operating profit before taxes, USD 1,353.7 million of net profit, and a return on equity of 19.1%.
Mizrahi Tefahot's controlling shareholders, the Ofer and Wertheim groups, currently hold about 41.43% 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, 2023, Mizrahi Tefahot Group operates through 206 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 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 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 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 December 13, 2023, rating agency Fitch Ratings (hereinafter: "Fitch") kept the Bank's rating under Negative Watchlist, which has been in effect since October 19, 2023, 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.
On February 9, 2024, Moody's rating agency lowered the credit rating for Israel from A1 to A2, due to concern about implications of the war in Gaza and military escalation in the North. The rating outlook was also lowered, to Negative. Further to its decision to lower the rating for the State of Israel, on February 13, 2024 Moody's announced it was lowering the credit rating of the top 5 banks in Israel, to A3 / Negative outlook.
