Mizrahi Tefahot Bank Ltd

Ladies and gentlemen, thank you for standing by. Welcome to the MidRocket for HotBank LTD fourth quarter 2025 business results conference call. All participants are as present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded February 26, 2026. With us on the line today are Mr. Adi Shachaf, CFO, and Mr. Manu Aviv, Chief Account. We would like to draw your attention to slide number one of the financial statement for the fourth quarter 2025 presentation, which includes general comments regarding legal responsibility, including debt. The information contained in the presentation constitutes information from the Bank's 2025 annual and quarterly reports and or immediate reports as well as the periodic, quarterly, and annual reports and or immediate reports published by the bank in the previous years. Accordingly, the information contained in the presentation is only partial and is not exhaustive and does not include the full details regarding the bank and its operation or regarding the risk factors involved in its activity and certainly does not replace the information including the periodic, annual, and or quarterly or immediate reports published by the bank. In order to receive the full picture regarding the bank's 2025 annual and quarterly reports, the aforesaid reports should be pursued fully as published to the public. The bank's results in practice may be significantly different from those included in the forecasting information. as a result of a large number of factors, including inter-area changes in the domestic and global equity markets, macroeconomic changes, geopolitical changes, legislation and regulation changes, and other changes that are not under the bank's control, which may lead to the estimations not realizing and or to changes in the business plans. The forecasting information may change subject to risk and uncertainty due to being based on the management's estimations regarding future events, which include inter alia global and local economic development forecasts, particularly regarding the economic situation in the market, including the effects of macroeconomic and geopolitical conditions. Expectations for changes and development in the currency and equity markets, forecasts related to other various factors, affecting exposure and financial risk. Forecast with respect to changes to borrowers, financial strength, public preferences, changes in legislation and provisions of regulators, competitive behavior, the status of the bank's perception, technological development, and human resources development. Mr. Shachaf, would you like to begin?

Thanks. Welcome all to the Mizrahi Tepachot 2025 annual analyst call. As you all know, the last two years were very unusual for Israel. From the first day of the war, the bank has taken a pro-client approach, trying to offer immediate relief to its clients beyond the mandatory relief plan of the Bank of Israel, while adapting the COVID experience and best practice to the current situation. As for the bank, it is much more boring, as you can see from the report and the results. I think the most conspicuous item in this report is the very strong credit growth. This growth is across the board along most of the asset classes, including mortgages, corporate, and middle markets, and is part of our strategic plan. And we think that this growth should help us to create a nice starting point for 2026. We think that our credit metrics reflect a balanced credit portfolio with adequate risk management. As you can see, provisioning was relatively standard for this period. And as for the other items, I would like to use this call to further highlight a couple of points. First may be the CPI contribution to financing revenues. It's traditionally low in Q4, and that was also the case this time with a negative CPI for the quarter. On top of the credit growth, we also witnessed a healthy growth in commission. We think that the net profit and the return on equity reflect the strong balance sheet and the good efficiency ratio. On the expense side, you can see the effective cost control that enables us to run the business in an efficient way. As always, salaries are also affected from variable remuneration related to the bank's results. It is also very noticeable that the results have been reached despite the relative extra tax Israeli banks are paying in 2025, and despite the extensive Bank of Israel client relief outline, our implementation of the outline is targeting more financing interest paying or saving benefits to clients and less operational benefits. Liquidity is very robust with high share of core deposits and capital ratios are in tandem with profitability and growth. Demand for mortgages is healthy and we continue to follow a strategy to retain our market share in the market. During the year, we continue to build the portfolio for the expected rate reduction. We think that it is reasonable to assume that today's balance sheet growth would materialize in the coming quarters and we do expect to see further responsible credit growth in coming quarters. We will distribute 50% of Q4 profits as dividends. To conclude, our key takeaways for 2025 are as follows. Strong financial results in line with the strategic plan despite geopolitical environment and lower inflation. Significant credit growth across all segments. It is worth noting that credit to the public crossed 400 billion shekels for the first time. Solid balance sheet mix with credit quality metrics continues to be healthy. Effective expense side control and 50% dividend distribution alongside 17% return on equity in line with the strategic plan. All in all, I think we are following our effective path and accommodating to the new environment. I would like to thank you very much for your attention and with that, I leave you with the hands of Mr. Manu Aviv, our Chief Accountant.

Thank you, Mr. Shachar. I will review the main figures from the financial statement and are as follows. The net profit in 2020-2025 reached 5,630,000,000 shekels compared with 5,455,000,000 shekels in 2024. The return on equity in 2025 reached 17% The equity amounted 34.8 billion shekels. The total revenue in 2025 reached 14.6 billion shekels. Financing revenues from current operations in 2025 reached 11.3 billion shekels. Provisions sold to the public, the ratio of provision to loans In 2025, it reached 0.06%. Operating and other expenses into 2025 totaled 5.2 billion shekels. The main balance sheet items development are as follows. Total assets grew by 13.5%, loans to the public by 11.9%, and deposits from public by 14%. The ratio of T1 capital to risk element reached 10.24% and the total ratio reached 13.05%.