New York Discount: 18% Decrease in Second Quarter Profits – $ 21m – Capital Market


Ziv Byron, Photo: Sivan Farage

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In the US – IDB New York, which is the largest Israeli bank in the US, published draft financial statements for the second quarter of 2020, with a decrease of 18% in net profit to the level of $ 21 million and a return on equity of approx. 7.7%. Revenue was $ 73.2 million, down 7.5%.

The corona crisis continued to affect the Bank’s results in the second quarter of 2020, with one of the main factors in the decline in profitability, beyond the decline in revenues, is a jump of 317% in credit losses, which amounted to $ 2.5 million, compared to $ 0.6 million in the corresponding quarter. last year. In addition, the efficiency ratio was 60.9% compared to 56.9% during the period.

Demand for deposits continued during the quarter (an increase of 3.5% compared with the previous quarter and 5.7% compared with the corresponding quarter last year). On the other hand, there was low demand for credit, a decrease of 4.4% compared to the previous quarter, but an increase of 3.7% compared to the corresponding quarter last year, trends that reflect the impact of the crisis.





These effects, in addition to the low interest rate environment, led to a significant decrease in interest income, which was partially offset by a decrease in the cost of raising deposits. Total net interest income was $ 62.2 million, up 5.1% from the previous quarter and down 1.9% from the same quarter last year.

Non-interest income amounted to $ 10.9 million, compared to $ 15.7 million in the same quarter last year, mainly due to a decrease in profits from trading activities and derivative activities of customers.

On the other hand, there was a decrease of 0.9% in total operating expenses, which amounted to $ 44.6 million, the volume of deposits increased by 5.7% and amounted to $ 8.7 billion, and net credit, which amounted to $ 6.6 billion, increased by 3.7%. There was also an improvement in the total capital of $ 1.1 billion – an increase of 9.9%.

The bank notes that no. enough. Me. New York continued to implement its five-year strategy while managing the consequences of the corona crisis and a smooth transition to a remote work model. In accordance with the Bank’s values ​​and the personal service culture in which it operates (“It’s Personal”), the Bank has provided its customers with easy loans. These concessions were granted under the Government Wage Protection Program, in accordance with the Economic Assistance to the American Corona Crisis Act. This program offers loans to businesses that will commit to continuing to employ their employees, which in some circumstances become a grant.

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