Bank Leumi Le-Israel B.M. (LUMI) Q4 2025 earnings summary

Executive summary

• Achieved record net income of NIS 10.3 billion for 2025, up 4.7% year-over-year, with ROE at 15.8%, meeting or exceeding strategic targets.

• Maintained best-in-class cost-to-income ratio at 29.3%, reflecting ongoing digital and AI-driven efficiency improvements.

• Delivered 14.1% net loan growth, surpassing the 8%-10% target, with improved credit quality (NPL ratio down to 0.40%).

• Distributed a total capital return of NIS 5.9 billion (58% of net profit) via dividends and buybacks.

• Maintained robust capital buffers and high liquidity despite regional conflict, with no material financial impact observed.

Financial highlights

• Net income for 2025 reached NIS 10.3 billion, a 4.7% year-over-year increase.

• ROE was 15.8% for 2025; normalized ROE would be 17.9% if excess capital were reduced.

• Cost-to-income ratio improved to 29.3%, among the best globally.

• Net loans grew 14.1% year-over-year, driven by corporate, infrastructure, real estate, and mortgages.

• Credit loss expenses ratio dropped to 0.09%, reflecting strong credit quality.

Outlook and guidance

• Net profit forecast for 2026-2027 raised to NIS 10-12 billion per year, with ROE targets of 14.5%-16%.

• Annual capital return targeted at 50%-65% of net profit; credit growth expected at 8%-10%.

• Macroeconomic assumptions for 2026-2027 include policy rates of 3.2%-3.7% and GDP growth of 5.2%.

• Focused on infrastructure financing, real estate, retail mortgages, and retail banking as growth engines.