Bank of America on Leumi results: resilient and attractive to shareholders
The investment bank gave Leumi a 'buy' recommendation and expects a 24% upside for the stock compared to its closing price yesterday. 'Revenue momentum has improved, the bank's efficiency has reached new record levels, and credit growth has already reached management's targets for the current year,' the economists wrote.
Bank of America has published its commentary on the positive results of Bank Leumi, released on Wednesday morning. The bank assigns a 'buy' recommendation with a price target of 93.5 shekels per Leumi share, a 24% premium relative to the stock price before trading opened.
'Bank Leumi delivered a strong quarter, with a net profit of 2.8 billion shekels and a return on equity (ROE) of 16.3%. The bank continues to implement its plan according to the target framework, while maintaining double-digit returns on equity along with excess capital. Revenue momentum has improved, the efficiency the bank has reached has hit new record levels, and credit growth has already reached management's targets for the current year,' the economists write.
The economists note that net credit to the public, which grew by about 9% in the half-year, was led by business credit. Deposit growth remained healthy, supporting continued balance sheet expansion without significant funding pressures. Trends in the bank's revenues strengthened particularly in the second quarter of 2026, driven by balance sheet growth, the Consumer Price Index (CPI-linked credit), and stronger growth in non-interest income.
Bank of America further notes that Leumi's net interest margin (NIM) remains resilient, and real financial revenues (excluding the Consumer Price Index) improved compared to the corresponding quarter. Commission income remained healthy, with an adjusted growth of 9% on an annual basis.
The economists reiterate their 'buy' recommendation and estimate a return on equity of 14.4% for the current year and 15.1% for next year. They believe Leumi offers an inviting combination of growth above forecasts, best-in-class efficiency, and resilience in asset quality and excess capital, all of which support continued profit accumulation and attractive returns for shareholders.
US investment banks impressed by results
Banking giant Citi and investment bank Jefferies complimented Bank Leumi's results on Wednesday. The Jefferies report noted that the Consumer Price Index in the second quarter (up 1.3%) supported the bank's net interest income, as did the increase in credit provision despite lower interest rates in the economy.
Bank Citi was also impressed, noting 'another strong quarter, with an impressive efficiency ratio.' The main emphasis in the quarter, according to Citi, was the efficiency ratio, which is best in class and dropped to 24.7% from 29.1% in the corresponding quarter. Citi added that Leumi's strong performance puts it in a strong position to meet the upper end of the strategic targets it set for 2026.
