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 March 31, 2024 amounted to USD 122.43 billion, and for the 3 months ended March 31, 2024, Mizrahi Tefahot reported USD 582.4 million of operating profit before taxes, USD 345.5 million of net profit, and a return on equity of 18.1%.
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, 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 May 2, 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 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 May 2, 2024, rating agency S&P Global Ratings (hereinafter: "S&P") confirmed the long-term issuer credit rating of A- and the 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 April 4, 2024 rating Company Fitch Ratings (hereinafter: "Fitch”) removed the Bank’s rating from a negative watch list, following the removal of the State of Israel’s rating from a negative watch list. Fitch ratified the Bank's long-term IDR at A, and the Bank's short-term IDR at F1+ Negative Outlook. 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. On May 10, 2024 the country's rating of A2 was ratified, and the forecast remained negative.
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 A2 (Negative Outlook).
For more information about the impact of the lowering of the State of Israel’s credit rating, kindly refer to Note 9 to the Financial Statements for Q1, 2024, available on this website under "Investor Relations".
