Summary of Developments
In the first half of 2013, the banking system maintained its resilience and stability, even as domestic and global real activity continued to grow moderately, and despite the interest rate environment remaining low.
Net income of the 5 major banking groups totaled about NIS 3.6 billion, reflecting a return on equity of 9.3 percent, similar to the long term average. Income was affected primarily by revenue deriving from capital market activity and by the decline in loan loss provisions.
The core Tier 1 capital ratio of the five major banking groups increased from 8.7 percent to 9.1 percent, within the framework of the banking corporations’ preparations for the implementation of the Basel III recommendations. The increase in the core Tier 1 capital ratio derived from retained earnings, as most banking groups did not distribute dividends, and from a decline in the balance of credit to the business sector.
Balance sheet credit declined by approximately 1 percent, due to a reduction in the balance of credit to the business sector and a continued decline in exposure to borrowers whose main activity is abroad. Credit to households, particularly housing credit, continued to expand. During the period, there were indications of some decline in the level of companies’ risk, but there is still a decline in the financial robustness of several leading companies.
The full survey, in PDF format
Israel's Banking System - First Half of 2013 - Tables
Israel's Banking System - First Half of 2013 - Figures