Slight decrease in Mizrahi Tefahot's quarterly profit to 1.43 billion shekels

Mizrahi Tefahot Bank concluded the second quarter of 2026 with a net profit of 1.43 billion shekels, compared to a net profit of 1.45 billion shekels in the same quarter last year — a decrease of 2%. The quarter's results reflect a return on equity of 16.0%, compared to 17.8% recorded in the same quarter (and 14.1% in the previous quarter).

Excluding the impact of the special tax plan for 2026 and the benefits to customers in the voluntary consumer plan, whose net impact totaled 164 million shekels for the quarter, the adjusted net profit stood at 1.59 billion shekels alongside an adjusted return on equity of 17.7%. The bank, managed by Moshe Lari, announced a dividend distribution of 50% of the net profit, totaling 714 million shekels in cash.

The net credit portfolio balance to the public totaled 424 billion shekels at the end of June, reflecting growth of 5.8% since the beginning of the year and 12.5% compared to the end of June last year. A central growth engine was the business sector, with credit to large businesses growing by 21.7% year-on-year to 56.9 billion shekels. The mortgage portfolio — the bank's traditional core activity — recorded growth of 8.7% year-on-year to 252 billion shekels, against the backdrop of a slowdown in the construction and real estate sector.

Net interest income for the quarter totaled 3.01 billion shekels, a decrease of 2.6% compared to the same quarter, where it stood at 3.09 billion shekels. The sharp increase in credit volumes barely translated into financing income, mainly due to Bank of Israel interest rate cuts of 0.75% during the period, the moderation of inflation, and the impact of consumer benefit plans. The total interest margin on activity in Israel eroded to 1.60% compared to 1.74% in the same quarter, while the public continues to shift funds from current accounts to interest-bearing deposits.

The profit engine that compensated for the interest margin erosion was non-interest income, which totaled 790 million shekels compared to 698 million shekels in the same quarter. The surge was due to a sharp increase in non-interest financing income, which reached 171 million shekels compared to 43 million shekels in the same quarter, against the backdrop of nostro profits and fair value adjustments in derivatives and securities. Commission income rose by 1.0% to 596 million shekels, supported by growth in securities commissions (92 million shekels) and credit card commissions (92 million shekels).

Operating expenses decreased by 2.7% to 1.29 billion shekels, with a 3.2% decrease in salary and related expenses, which totaled 830 million shekels. The provision for credit losses rose to 90 million shekels (0.08% of the portfolio) compared to 56 million shekels (0.06% of the portfolio) last year. The rate of non-accruing debts or debts overdue by more than 90 days fell to 0.95% of the portfolio compared to 1.07% last year. Total public deposits reached 474 billion shekels at the end of the quarter, an increase of 13.7% compared to the same period.