Union Bank of Israel (TASE: UNON)>) today published its financial reports for the fourth quarter of 2006 and the year as a whole. Net profit for 2006 rose 53% over 2005 to NIS 121 million, and the return on equity rose to 9% from 7%.
Union Bank’s net profit from regular operations rose 11.7% to NIS 153 million for the year, but the provision for taxes rate rose to 48.4% in 2006 from 39.4% in 2005. The sharp drop in inflation caused a NIS 15 million increase in the bank’s tax provision and cut its net profit. The bank’s after-tax profit from extraordinary activity was NIS 42 million.
The bank’s provision for doubtful debts fell 45% to NIS 82 million in 2006 from NIS 149 million in 2005, and the doubtful debts as a proportion of total credit fell to 0.5% from 0.9%. Operating profit after the provision for doubtful debts rose 5.5% to NIS 457 million.
Credit to the public rose 12.7% to NIS 18.4 billion. Credit risk for problem borrowers fell 29.9% to NIS 1.03 billion. Public deposits rose 15.4% to NIS 25.32 billion. The bank’s capital adequacy ratio rose to 10.9%, above the Bank of Israel mandated minimum of 9%.
Both operating revenue and operating expenses rose by 2.7%: operating expenses totaled NIS 554 million and operating revenue totaled NIS 265 million, which means that revenue covered only 46.6% of expenses, the same level as in 2005.
Published by Globes [online], Israel business news - www.globes.co.il - on February 28, 2007
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