Leumi Mortgage Bank profit collapses 57 percent: The provision for doubtful debts tripled to NIS 94 million for January-September.

Tue. November 11, 2008; Posted: 03:38 PM

Nov 11, 2008 (Globes - McClatchy-Tribune Information Services via COMTEX) -- LMGBF | Quote | Chart | News | PowerRating -- Bank Leumi (TASE: LUMI) subsidiary Leumi Mortgage Bank today published its financial report for the third quarter of 2008. The bank posted a net profit of NIS 47 million (NIS 50 per share), 56.9 percent less than the NIS 109 million for the corresponding quarter of 2007.

Leumi Mortgage Bank reported income from taxes and a reduced tax expense for the corresponding quarter of 2007: NIS 38 million for closing a tax assessment for 2000-05, and NIS 19 million for an inflation-adjusted tax reduction.

Leumi Mortgage Bank's provision for doubtful debts was NIS 25 million for the third quarter, 31.6 percent more than the NIS 19 million for the corresponding quarter. The bank's provision for doubtful debts for January-September more than tripled to NIS 94 million from NIS 31 million for the corresponding period, which was a factor in the 45 percent reduction in net profit to NIS 106 million in January-September from NIS 191 million in the corresponding period. The 5 percent rise in the Consumer Price Index (CPI) in January-September boosted the provision for doubtful debts on index-linked mortgages by NIS 33 million.

Leumi Mortgage Bank's capital adequacy ratio rose to 9.48 percent at the end of September, down from 9.96 percent a year earlier, but still above the Bank of Israel mandate 9 percent minimum.

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