United Mizrahi Bank (TASE:MZRH) today revealed a 21% dip in net profit to NIS 70 million for the second quarter of 2002, as predicted by analysts. For the parallel quarter of 2001, Mizrahi reported netting NIS 89 million. For the half year, Mizrahi netted NIS 146 million, about 10% less than in the corresponding six months of last year. Of that, NIS 86 million was generated by the bank and its subsidiaries, and NIS 72 million derived from Mizrahi's holdings in the mortgage bank Tefahot. Mizrahi set aside NIS 58 million provision for doubtful debt in the second quarter, 35% more than in the parallel quarter. Most of the increase was due to defaulting borrowers at Tefahot. The bad debt provisions comprised 0.39% of Mizrahi's total credit portfolio, in annualized terms, compared with 0.28% in the parallel quarter of 2001. Second-quarter income from financing shrank to NIS 332 million, down 9% from the second quarter of last year. Seen for the half year, though, financing income increased 1% to NIS 673 million. During the first half, Mizrahi lost NIS 6 million on investment in shares, compared with losing one million shekels on equity investments in the parallel quarter. The bank achieved a 9.1% yield on equity, versus 11% in the parallel quarter. At the end of the second quarter, Mizrahi's capital adequacy ratio stood at 9.44%, compared with 9.11% at the start of the year. Its shareholders equity on June 30, 2002 was NIS 3.36 billion, up 2.4% from the beginning of the year. Mizrahi's results were in line with analysts' predictions. Leader & Co analyst Yuval Ben Dror had estimated financing income of NIS 330 million, and a net profit of NIS 63 million. Nessuah Zannex analyst Ronit Goodman had estimated financing income of NIS 320 million, and a net profit of NIS 69 million. "Mizrahi's results will look better than those of the other banks," Goodman told TheMarker. "We are seeing a drop in yield on equity compared with the parallel period, but the yield is still good." The quality of Mizrahi's credit portfolio is one of the highest in the business, Goodman added, as attested by its relatively low ratio of doubtful debt provision. The big banks will be forced to set aside the equivalent of 0.85% to 0.9% of their credit portfolio, she estimates.