(Adds details, data, chairman’s quote)
TEL AVIV, Feb 26 (Reuters) - Bank Leumi, one of Israel’s two largest lenders, reported a smaller than expected rise in quarterly net profit as interest income fell and it announced a new share buyback plan.
Leumi said on Wednesday it earned 742 million shekels ($216 million) in the fourth quarter, up from 688 million a year earlier. The bank was forecast to earn 844 million shekels, according to a Reuters poll of analysts.
Net interest income fell to a less-than-forecast 2.16 billion shekels from 2.27 billion a year earlier and credit loss provision fell to 158 million shekels from 205 million.
Income from commissions was also down at 799 million shekels from 1.05 billion while tax expenses rose.
“These results were achieved against a background of challenges and changes in the banking system - both internal and external, regulatory and technological, business and consumer-oriented - which require determination and adherence,” Chairman Samer Haj Yehia said in a statement.
“These changes are expected to continue to take place in the future, and we at Leumi are working persistently to adapt our business model.”
Leumi declared a quarterly dividend of 297 million shekels, representing 40% of net income and down from 306 million in the third quarter.
The bank’s board also approved a new share buyback programme for 2020 of up to 700 million shekels after buying a similar amount in 2019.
Its Tier 1 capital ratio, a key measure of financial strength, was 11.88% at the end of 2019, up from 11.07% in 2018.
$1 = 3.4345 shekels Reporting by Tova Cohen and Ari Rabinovitch; editing by David Evans