Gmul Sahar Securities Brokerage analyst Ronit Halima maintains a Buy rating for Bank Leumi and sets its price target at NIS 9.2, 18% above its market price. Gmul Sahar estimates a 9% return on equity for the bank next year, and therefore values it at NIS 12.9 billion.
Halima emphasizes the staying power of Bank Leumi and Bank Hapoalim, which managed to increase their revenue on financing in spite of the dire state of the banking sector.
Halima attributes the two banks' resilience to their size, and estimates that the continuing recession will widen the gap between them and the smaller banks, and emphasize their advantage in the banking sector.
The brokerage feels the banks will be all too happy to put the lousy Q3 results behind them. The dismal figures were the result of provisions required by the Supervisor of Banks, and of the altogether struggling market.
Halima explains that provisions were made towards specific problematic lenders, which is less desirable than provisions made towards general credit risks.