Israel's First Intl Bank profit up as default provisions reverse

JERUSALEM, May 26 (Reuters) - First International Bank of Israel (FIBI), the country’s fifth-largest bank by assets, reported on Wednesday a 68% rise in quarterly profit on a reversal of pandemic loan loss provisions.

First-quarter net profit was 287 million shekels ($88.5 million), up from 171 million a year earlier.

Income for credit losses was 9 million shekels after marking provisions for loan losses of 157 million last year. Net interest income rose to 670 million shekels from 658 million shekels.

Like its peers, FIBI allowed customers to defer loans due to the COVID-19 pandemic. The ratio of deferred debts to total credit to the public at the end of March amounted to 0.5%, versus 1.9% at the end of December.

“The volume of loan repayment deferrals showed a sharp downward trend, indicating the quality of our credit portfolio and that of our borrowers, as well as pointing to the recovery of the local economy,” said Chief Executive Smadar Barber-Tsadik.

“The bank strictly maintains its security cushions for credit losses, in view of the uncertainty, the high unemployment rates in Israel, the impact of the security situation as well as the pandemic situation which remains in large parts of the world,” she added.

The bank’s Tier 1 capital ratio rose to 11.55% from 10.28% at the end of 2020.

Banks will not be allowed to pay dividends until later in 2021. ($1 = 3.2448 shekels) (Reporting by Steven Scheer; Editing by Kirsten Donovan)