While profits dropped sharply in the first quarter of 2008 due to the US credit crisis, since 2003 total income had increased by 29% (compounded average annual growth rate of 7%) whereas operating expenses had increased by only 23% (compounded average growth rate of 5.3%).
On performance the bank achieved a 17.4% return on equity in 2007, the highest in the Israeli banking sector, along with the best cost-income ratio at 56.3% and the highest capital adequacy ratio. Also between 2003 and the end of 2007 total assets under management, which include both on- and off-balance sheet assets, grew at a compounded average growth rate of 13.5%.
In terms of structure the bank increased the diversification of its credit portfolio and achieved double-digit growth in higher margin segments (households, small businesses, commercial banking) and took advantage of disintermediation by offloading loans considered unattractive. The bank also expanded its branch network and invested in building strong middle and back-office operations that support growth in capital market activities, where there has been significant growth in revenues as well as in trade finance services.
“We’re honoured to be awarded this prestigious Bank of the Year award by The Banker, for the second year in a row, “says Galia Maor, president and CEO of the Leumi Group. “I would like to congratulate all of Leumi’s staff in Israel and around the world, they have been able to maintain Leumi’s position as the leading banking group in Israel. “
