Financial Reports 2nd Quarter 2022

Net profit in the second quarter of 2022: NIS 1,053 million
Compared to NIS 988 million in the corresponding period last year
Increase of 6.6%

Net profit in the first half of 2022: NIS 2,207 million
Compared to NIS 1,664 million in the corresponding period last year
Increase of 32.6%

Accelerated growth in credit to the public:
Amounted to NIS 298.2 billion at the end of the first half
Increase of 17.3% compared to the corresponding period in 2021;

In the first 6 months, the credit portfolio increased by NIS 27 billion
This amount is higher than the total increase in the portfolio in all of 2021

Return on equity in the second quarter: 19.4%
Return on equity in the first half: 20.6%

Cost-Income Ratio in the second quarter: 45.0%
Cost-Income Ratio in the first half: 44.1%

Dividend distribution of NIS 316 million – 30% of
the second quarter's profit

Continued growth in Bank business, along with macro-economic effects

Data for the first half of 2022 reflect continued growth in Bank business. This is reflected in 22.8% growth in financing revenues, as well as in significant increase in key balance sheet items. Total assets as of June 30, 2022 increased by 11.4% compared to the corresponding period last year; Deposits from the public increased by 11.4% and credit to the public as of June 30, 2022 increased by 17.3% compared to the corresponding period last year.
The extraordinary growth in the credit portfolio was across all segments, and particularly in the business segments – which all recorded double-digit growth rate. Thus, credit to medium businesses as of June 30, 2022 increased by 13.3% compared to the corresponding period last year; Credit to micro and small businesses increased by 17.5% and credit to large businesses as of June 30, 2022 increased by an impressive 39.3% compared to the corresponding period last year.
Changes in the macro-economic environment also contributed to Bank profit and profitability. Due to local and global events, the pace of inflation accelerated, in Israel as well. In the first half of this year, the Consumer Price Index increased by 3.2%, compared to an increase of 1.6% in the corresponding period last year. Consequently and in order to curb inflation, the Bank of Israel started to raise interest rates, currently at 1.25%. This compares to 0.10% at the end of 2021.

Service upgrade through optimal combination between human and technology aspects

Mizrahi Tefahot continues to adhere to its unique service concept, which places the personal, human banker at the center of customer relations along with a complementary set of advanced digital channels. This, while further deploying innovative tools in order to reach an optimal combination between human and technology aspects in service provided to customers.
Thus, inter alia, the Bank is currently implementing a modern CRM platform with advanced capabilities, which allows bankers to make adjustments to service according to customer needs, in accurate and proactive manner, down to the individual customer level. This is in addition to incorporating, earlier this year, the unique, innovative Tefahot Touch app into the Bank's mortgage system. Here, too, technology and human service are well-integrated, allowing the customer to manage and monitor the mortgage process themselves, easily and conveniently, using their cell phone, while concurrently enjoying the benefit of personal assistance from an expert banker, available at any time for any need.
At the same time, the Bank continues to expand availability of human service at branches and at banking call centers. Unlike other banks, which in recent years closed many dozens of branches and significantly cut-down on service-oriented staff, Mizrahi Tefahot continues to maintain an extensive branch network – which grew even more with the Union Bank merger – with optimal geographic coverage, including in the Jewish Orthodox and Arab sectors. The Bank's banking call centers provide the longest business hours service in the banking system; Recently, the Bank opened another call center in the Northern region, in addition to existing call centers in Lod and Jerusalem, to help improve and upgrade phone support for customers.

Moshe Lari: Bank results in the second quarter reflect continued growth, In view of macro-economic events and higher interest rates

"The results we present for the second quarter of 2022 and for the first half of this year reflect continued growth momentum, typical of the Bank in recent years, in view of developments in the local and global macro-economic environment, higher interest rates and the impact thereof on the Bank's balance sheet.
This expansion is reflected across most areas of Bank business. Financing revenues from current operations increased in the second quarter by 27.2% compared to the second quarter of 2021, amounting to NIS 2,053 million; Commission revenues increased by 8.3% compared to the corresponding period last year, amounting to NIS 508 million.
Key balance sheet items, including total assets, credit to the public, deposits from the public and securities, achieved double-digit growth over the corresponding period last year. Most prominent is growth of the portfolio of credit to the public, which at the end of the first half of this year reached NIS 298.2 billion, an outstanding growth of 17.3% compared to the corresponding period last year. Despite the global economic slow-down, the Israeli economy continued to present strength, with high demand for credit across all operating segments. As a result, and in order to provide an optimal solution for diverse credit needs of our individual and business customers, in the first six months of 2022 the Bank extended credit amounting to NIS 27 billion, of which NIS 10 billion to businesses in the various segments.
Continued growth of Bank business, as well as the outstanding financial results, are further proof of the quality of our human capital. The thousands of outstanding employees and managers at Mizrahi Tefahot provide a unique service experience to our customers, work diligently to achieve the Bank's targets and achieve remarkable accomplishments. For this we are thankful and appreciative.
Union Bank's merger into Mizrahi Tefahot is being carried out as planned, with tens of thousands of Union Bank customers already onboarded to the Bank. Concurrently, Mizrahi Tefahot welcomed hundreds of experienced professional Union Bank employees, who provide key reinforcement to ensure the successful completion of the merger and achievement of the Bank's future targets.
Bank Yahav of Mizrahi Tefahot Group continues to achieve good financial results and robust performance. In the first half of the year, Bank Yahav net profit amounted to NIS 106 million, compared to NIS 97 million in the corresponding period last year, with an outstanding 11.9% return on equity.
After one quarter with no dividend distribution, the Board of Directors decided to resume dividend distribution with respect to profit in the second quarter of 2022. Mizrahi Tefahot shareholders will enjoy a dividend of NIS 316 million in total- 30% of quarterly profit", says Bank President & CEO Moshe Lari.