Bank Leumi, headed by Hanan Friedman, posted a second quarter profit of NIS 2.83 billion, the highest quarterly profit ever recorded by an Israeli bank, and 8.5% higher than the NIS 2.6 billion profit in the corresponding quarter of 2025. The bank’s annualized return on equity in the quarter was 16.3%, just above the 16.2% return in the corresponding quarter.
The higher profit and return on equity come despite the imposition of an aggregate NIS 3 billion surtax this year on the five major banks. Excluding the surtax, Bank Leumi’s quarterly profit was NIS 3.1 billion and the return on equity was 17.9%.
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In the first half year, Bank Leumi’s annualized return on equity was 14.9%, at the higher end of the 13.75-15.25% range in its strategic plan. The bank will distribute a dividend of NIS 1.4 billion, NIS 1.1 billion in cash and the remainder in the form of a buyback of shares.
Net interest income in the first half year was NIS 4.57 billion, 0.7% higher than in the corresponding period of 2025.
Non-performing loans amounted to 0.45% of the bank’s credit portfolio in the second quarter, slightly more than the 0.43% in the corresponding quarter. The credit loss expense was NIS 291 million, 0.2% of the average balance of credit to the public, similar to the 0.19% in the corresponding quarter.
In the first half year, the credit loss expense was NIS 457 million, 0.17% of the average balance of credit to the public. This compares with 0.12% in the corresponding period of 2025. The bank said that the second quarter was the tenth successive quarter in which the entire credit loss expense represented a general provision, and that on specific provisions there was a net recovery. Rapid growth in credit obliges the bank, because of regulation and out of prudence, to make general credit loss provisions. Bank Leumi’s credit portfolio grew by 9% to NIS 566 billion in the first half year, outstripping the 6.6% growth at its main competitor Bank Hapoalim, meaning that it has already achieved its annual growth target of 8-10%.
The bank’s efficiency ratio improved dramatically, falling to 24.9% from 29.1% in the previous quarter. This is a low ratio in international terms, and probably the best among Israel’s banks. The bank explains the improvement partly by the use of artificial intelligence.
Bank Leumi’s share price has climbed 24% in the past year. It has a market cap of NIS 110 billion, making it Israel’s largest bank in those terms.
Published by Globes, Israel business news - en.globes.co.il - on August 12, 2026.
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