TheTicker: Israel to Sell Last Remaining Shares in Bank Leumi for an Expected NIS 2 Billion

Housing & Construction may put its African business up for sale ■ First Int’l Bank quarterly profit falls 17.5% on one-time costs ■ Gazit Globe turns in wider loss in first quarter versus a year earlier ■ Disappointing earnings take toll on insurance stocks

The Bank Leumi logo on the front of the company's headquarters in Tel Aviv, November 9, 2010.
Bloomberg

Israel to sell last remaining shares in Bank Leumi for an expected NIS 2 billion

After years of delays, the Israeli government has decided to sell its last remaining holdings in Bank Leumi and hopes to fetch some 2 billion shekels ($560 million) from the sale to help pay down government debt. MI Holdings, the government company that holds the shares, has gotten approval from Finance Minister Moshe Kahlon to move ahead with the sale of the 5.83% stake and is now drafting the documents needed before the Knesset Finance Committee can approve the sale in the next few weeks. The government is looking to sell the shares over the course of the year after Knesset approval, but market sources said it would likely act to divest them more quickly than that. The Finance Committee had originally approved the sale in 2014, but the four-year delay in acting on it will mean a lot more money for the state because Leumi stock has risen 66% since. On Monday, it closed unchanged at 22.79 shekels. (Michael Rochvarger)

Housing & Construction may put its African business up for sale

Housing & Construction Limited said on Monday that it was weighing putting its troubled African operations up for sale. SBI International Holdings, which accounted for about 17% of the company’s revenues last year and close to a quarter of its net profit, is the target of an international investigation that it paid bribes to Kenyan officials to win contracts. H&C didn’t provide any further details except to say it was considering either selling the company or just its operations. Meanwhile, it reported that net profit dropped 75% in the first quarter to just 17 million shekels ($4.8 million) as revenues plunged 28% to 1.4 billion shekels. The revenue drop was in large part due to the completion of major infrastructure projects in Israel and as well as lower home sales. But the company also suffered a 30% falloff in revenues from overseas infrastructure projects, mainly in Ghana, Togo and Uganda. H&C shares ended down 2% at 5.73 shekels. (Yoram Gabison)

First Int’l Bank quarterly profit falls 17.5% on one-time costs

First International Bank of Israel, the country’s fifth-largest lender by assets, on Monday reported a 17.5% decline in first-quarter profit, mainly due to one-time salary expenses. FIBI posted a quarterly net profit of 137 million shekels ($38 million), down from 166 million a year earlier. However, excluding one-time items, the net was 169 million shekels, up from 138 million in the same period last year. The bank said it incurred a non-recurring payroll expense of 45 million shekels and another expense of 24 million shekels for efficiency measures. “The quarterly results include a provision for future efficiency measures to be taken at Otzar Hahayal, which will allow us to further improve the group’s efficiency ... and our ability to compete in the banking market,” said CEO Smadar Barber-Tsadik. The bank’s Tier 1 capital ratio edged down to 10.07% in March from 10.38% at the end of 2017. Net interest income rose to 584 million shekels from 562 million a year earlier while expenses from credit losses slipped to 27 million shekels from 34 million. FIBI shares finished 0.2% lower at 80.39 shekels. (Reuters)

Gazit Globe turns in wider loss in first quarter versus a year earlier

Gazit Globe, Israel’s largest real-estate company, on Monday reported a wider loss in the first quarter. The company said it had a quarterly net loss 2.51 shekels (70 cents) per diluted share, compared with a loss of 1.44 a year earlier. Funds from operations, or FFO, a measure of cash generated, fell 3.4% to 168 million shekels. “The disposals of Regency and First Capital shares have led to a decrease in our FFO which was almost completely offset with the strong operational results in Brazil and Israel, which are not yet fully reflected in our results and are expected to have an effect in the year remaining,” said CEO Chaim Katzman. Property rental income rose to 711 million shekels from 698 million, while net operating income rose to 492 million shekels from 477 million. Excluding the effect of exchange rate fluctuations, net operating income fell 2.2%. Shares of Gazit finished down 0.6% at 33.69 shekels. (TheMarker Staff)

Disappointing earnings take toll on insurance stocks

Tel Aviv shares fell on Monday in light trading, with insurance stocks hit by disappointing earnings. The benchmark TA-35 index ended down 0.25% at 1,524.27 points, while the TA-125 shed 0.2% to 1,370.11. Turnover was a light 739 million shekels ($207 million) because of a bank holiday in the U.K. and Memorial Day in the United States, which kept foreign investors away. Among insurers, Migdal dropped 2.9% to 41.69 after turning in a 31 million shekel after-tax loss in the first quarter, versus a 309 million profit a year earlier, due to a drop in investment income.  Menora lost 2.9% to 41.69 after it reported after-tax profit shrunk to 15 million shekels from 57 million a year earlier. The biggest loser was Clal Insurance, which has yet to report it quarterly results. Its shares slid 3.6% to 57.90. The Bank of Israel on Monday kept its benchmark interest rate unchanged at 0.1% for the 34th straight time since early 2015. (TheMarker Staff)