Bank Leumi Le Israel

Ladies and gentlemen, thank you for standing by. Welcome to LUMI's fourth quarter 2024 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded March 4th, 2025. I'd like to remind everyone that forward-looking statements for the respective company's business, financial condition, and results of its operations are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. Such forward-looking statements include but are not limited to product demand pricing, market acceptance, changing economic conditions, risks in product and technology development, and the effect of the company's accounting policies, as well as certain other risk factors, which are detailed from time to time in the company's filings with the various securities authorities. I would now like to turn over the call to Mr. Michael Klar, Head of Investor Relations. Mr. Quar, please go ahead.

Thank you, operator. Ladies and gentlemen, we thank you for taking the time to join us for Bank Loomis' fourth quarter and full year 2024 results conference call. Joining me today is Mr. Hanan Friedman, President and CEO, Mr. Omer Ziv, Deputy CEO and Head of the Capital Markets Division, and Ms. Chagita Goff, CFO and head of the finance division. A presentation will be presented during the call for those joining by webcast. The presentation is also available on the IR section of the bank's website for those dialing in. I would now like to turn the call over to Hanan.

Good afternoon to everyone. Earlier today, we published our financial results for 2024. We also published for the first time key financial targets for 2025 and 2026 based on our strategic plan. Although 2024 has been a challenging year for Israel, I am very pleased to say that we have demonstrated another strong year with record results and profitability, the highest ever, in line with our targeted growth strategy. Before presenting the highlights of Bank Luumi's 2024 results, I wish to share some points about the Israeli economy, which have a great impact on our business. At the beginning of 2024, yearly forecasts predicted negative performance of the Israeli economy. However, during the year, the economy showed its resilience with GDP growth of 1% in real terms. This performance not only defied early expectations, but also highlighted the strength of the Israeli economic fundamentals and the unique resilience of the Israeli population. This reinforces our confidence in Israel's long-term growth prospects. Based on our technology capabilities data and AI-based models, we reaffirmed the execution of our strategy. doing more and better with fewer resources. We increased revenue by 10% while keeping expenses flat. We once again did so while attaining the best results in quality of our credit portfolio. We have one of the lowest NPLs in the market. And I remind you, NPL is the sole objective parameter for the quality of the credit portfolio. We also did better in our service revolution as part of our vision to be the bank that offers the best and the most convenient service. The service revolution was a major catalyst for our rapid growth in the raising of retail deposits much more than our competitors. We attained a net income of 9.1 billion shekels, up approximately 40% on 2023. ROE was 16.9%. This was achieved against the backdrop of an ongoing war and a challenging macroeconomic environment. Notably, in 2024 and in previous years, we managed to responsibly grow our credit portfolio with improving credit quality metrics. Our NPL and trouble debts as a share of gross loans have both declined and remain much lower than the industry average. Our expenses have remained stable despite continuing high inflation in recent years. We achieved this through the bank's ongoing investments in technology. This led to improved customer experience and service, improved operational processes, and reduced operational risks. Our cost-to-income ratio, which further declined, to 29.9% is the best, not only in the Israeli banking system, but also, I am proud to say, one of the lowest globally. We aim to maintain this strategy and keep it that way. Our strong report is a further demonstration of Bank Luumi's excellent execution capabilities and their ability to deliver. Our quote to one capital ratio of 12.17% at year end is comfortably the highest in the sector and about 2%, approximately 10 billion shekels above our minimum regulatory requirements, supporting asset growth and significant capital return. Today, we announced that we will distribute a payout of 40% of the earnings of Q4, totaling 1 billion shekels. With the world winding down, We are optimistic that the regulator will permit us to distribute more of our excess capital to our shareholders in the near future. Our leadership in technology continues. We continue to successfully execute our growth strategy in the mortgage sector, supported by our Zoom Mortgage product. This has significantly increased our share of new mortgages to close to 30% market share. Nomi's mortgages book has grown by more than 30% in the last three years, outpacing the market. We did this without compromising on price or risk management, maintaining the lowest rate of high-risk mortgages and the lower mortgage NPLs than the market. We are in the process of launching a new platform for deposits that will allow us to expand our offering to customers and increase deposits. In 2024, co-deposits in our retail division increased by 5.1%, greater than the competition. Customer service offerings defined by the bank as a strategic goal are being transformed by upgrading the application and the website by expanding products and services, and by responding rapidly to customers within minutes and improving SLA. For example, Lumi customers today can message their branch manager directly or message my personal team if an issue is unresolved within one business day. Another feature is that English-speaking customers can use our English language app, the first one on the local market. These efforts and many more are highly appreciated by our customers who are making Bank Lumi their first choice. In the most recent Bank of Israel customer satisfaction survey published last month, Lumi ranks first among the five large banks for service in five categories out of nine, and in addition, ranks second in another category. We are ranked number one in telephone banking, the mobile app application, and our website. Aside from the clear revenue benefits, more satisfied customers also reduce customer friction and improve efficiency. At Pepper, our digital bank, we are launching a new strategy following the migration to Lumis core systems. Pepper is already a leading digital option for our younger customers, But these changes allow us to improve the customer interface and then many new products, further to improving our offering. From now on, Petro will play a material role in implementing our strategy for the retail sector, including in raising cold deposits. Looking forward, following the recent ceasefire in Gaza and in the north, there has been a decrease in macro risks, credit risks, and risk related to global market attitude towards Israel. We expect GDP growth of 4% in 2025 as the economy rebounds after the challenging 17 months. In the fourth quarter of 2024, we already saw a peak in domestic consumption and higher fixed investment. We expect this trend to continue at greater pace. Our customer-focused model, together with our high operating leverage, advanced capabilities in rapid production of tailor-made solutions for our customers' needs, and our healthy balance sheet mean that we are best positioned to take advantage of this growth. The excellent execution of our recent strategy and our well-proven performance give us the confidence to publish key financial targets for 2025 and 2026 based on our strategic plan. This strategy will accelerate our journey in the segments that we have already selected as part of previous strategy. In addition, the new strategy includes other segments that will grow rapidly and many other new initiatives. The key financial targets for 2025 and 2026 are ROE of 15 to 16%, annual net profit of 9 to 11 billion shekels, credit growth of 8 to 10% annually, and capital return of minimum In addition, the publishing, in addition to publishing these key targets, we'll also present our new strategy for the coming years at the local investors conference on March 20, followed by presentations to our foreign investors. I invite you to join us. On a personal note, the last 17 months have been a very challenging time for the whole country. Everyone is affected. I would like to share with you how proud I am with our employees and the organization for overcoming this difficult period. I would like to take this opportunity of thanking our stakeholders, our employees, our customers, and you, our investors, for your continued support and trust. With that, I will hand over to Chagik, who will walk you through the financial results.