First Int'l's tough times: NIS 70m loss, NIS 294m in doubtful debts - TheStreet

Two days after publishing its profit warning, First International Bank presented a heavy loss of NIS 70 million for the first quarter of 2002, compared to NIS 64 million profits in Q1 2001.

The loss stems primarily from massive NIS 294 million provisions for doubtful debt, a sum that was just NIS 31 million in the parallel reporting period. In contrast, the bank¿s entire provision for 2001 was NIS 444 million.

The bank notes that the unusual rate of doubtful debt stems from material deterioration in the state of a small number of communications sector borrowers.

Nonetheless, the bank tries to calm regarding coming quarters and adds that "to the best of management¿s knowledge and estimation, the negative trend in the global and local communications sectors that had such significant effects on the bank¿s Q1 results, does not constitute an indication of the volume of doubtful debt in the group for the rest of the year".

Profits from financing activities, before provisions, were eroded 3% to NIS 307 million, compared to NIS 318 million in the parallel reporting period. The fall stems largely from a NIS 15 million provision for the permanent loss of value in available bonds and the effects of the difference between actual and estimated CPIs, which lowered financing profits by NIS 12 million.

Revenue from operating fees came to NIS 162 million in the quarter, up 11% on Q1 2001. Most of the increase stemmed from increased revenue on securities operations.

Net yield on capital in annual terms reached a negative 8.3% compared to a positive 8.5% in Q1 2001 and a positive 1.6% in Q4 2001.