Financial Report Annual 2009

Eli Yones:

 Accelerated expansion of Bank business continued in 2009

"The 2009 financial statements reflect continued growth and evolution of Bank business, in many areas, resulting from increased market share and volume of operations. Thus, for example, profit from financing operations grew by 11.4% in the most recent quarter, compared to the corresponding period last year, with this item recording overall growth higher than 4% for the full year; operating and other revenues recorded solid growth last year, both in the fourth quarter - at 26% - and for the full year: by 12.6%, before consolidation of Bank Yahav's financial statements, or by over 19% after consolidation.

Furthermore, over 40,000 target household clients were recruited last year, as well as about 6,000 new business clients; the Bank's share of mortgages issued in 2009 was 36%, compared to 34% in 2008, maintaining its leadership position in this sector; credit to the public grew by over 7%, led by expansion of retail credit: 17% growth in mortgages and 12.1% growth in household credit, as well as 13% growth in revenues from securities transactions.

In the second half of the year, the Bank recorded a significant provision for voluntary employee retirement program, which is part of the labor agreement signed with the Employee Union this year. As part of this agreement, Employee Union representatives committed to maintain calm labor relations through 2015. The retirement program, the second one since 2006, is a further step in a sustained move towards improved efficiency, launched by management in recent years, and contributes significantly, not only to maintaining control of payroll expenses and improving profitability in the non-immediate future, but also to improving the quality of Bank staff.

The increase in public credit and deposits, the improved credit spread and the higher operational revenues were also reflected, although partially, in the bottom line for 2009 - due to the non-recurring provision for voluntary retirement program, and the unusual interest rate environment which prevailed in the Israeli economy last year.

There is no doubt, however, that achievements made this past year, as well as the outstanding professional team responsible for it, form an excellent base for continued progress to be made on the Bank's strategic plan and for achieving its objectives", said Bank President, Eli Yones.

Mizrahi-Tefahot Bank Ltd. Highlights of financial statements

As of December 31, 2009 - NIS in millions

Major balance sheet items

Profit and Profitability

Financial ratios