Disclosure — Paragraph 1: The information presented in this document is provided for informational and educational purposes only. It does not constitute investment advice, investment marketing, portfolio management, or a substitute for personalised advice tailored to the client. The firm operates as a Family Office serving qualified investors only. The firm's founder held a licensed investment-advisory practice from 2008 through 2023; the licence is no longer active.

Disclosure — Paragraph 2: Nothing herein constitutes a recommendation to buy, sell or hold any security. This document does not provide a score, a rating, a price target or an investment conclusion. This site does not participate in the investment decision — the decision rests solely with the client.

Disclosure — Paragraph 3: Past performance is not indicative of future results. Historical data is presented as documented facts drawn from the bank's official disclosures, with no forecast regarding the continuation of any trend.

Bank Leumi le-Israel B.M.

Bank Leumi le-Israel B.M. | TASE | Universal Banking — Israel

FY2025 Annual Report | Approved 02/03/2026 | Primary source: TASE Maya

LUMI
Research Depth · Standard Banks · Israel | TA-125
Net Profit FY2025
10,262M ₪
+4.7% Y/Y | all-time high
ROE FY2025
15.8%
Normalised: 17.9%
CET1
12.05%
Regulatory minimum: 10.24%
NPL Ratio
0.40%
2023: 0.85% | 2024: 0.50%
Efficiency Ratio
29.3%
2021: 45.8% | 2024: 29.9%
Dividend Yield
6.5%
Payout 58% | NIS 5.9B distribution
Market Cap
₪114.95B
StockAnalysis · 08/05/2026
P/E (TTM)
11.35
EPS NIS 6.86
P/B Ratio
1.69
StockAnalysis
ROE (TTM)
15.81%
StockAnalysis
Trailing Div. Yield
3.82%
StockAnalysis · 08/05/2026
1 Company Profile

Bank Leumi le-Israel is one of the two largest banks in Israel, operating as a universal bank. It provides retail, business, commercial and corporate banking, as well as mortgage, capital-markets, asset-management and trade-finance services. The bank trades on the Tel Aviv Stock Exchange (ticker: LUMI, security 604611) and is a constituent of the TA-35 and TA-125 indices. Since 24/03/2012, Leumi has been designated a banking corporation without a controlling shareholder — no single shareholder is classified as controlling. The business model rests on two engines: net interest income (the spread between interest charged on loans and interest paid on deposits) and fee income from banking services. International activity is conducted through the Leumi UK Group (commercial lending in the UK and Europe — real estate, hospitality, asset-based lending). Additional subsidiaries include Leumi Partners (real-asset investments and investment banking), Leumi Capital Market Services and Leumi Underwriting. CEO: Hanan Friedman. Chairman: Uri Alon (in office since 08/2023).

Revenue Mix 2025

ComponentNIS M% of total
Net interest income16,85274.3%
Non-interest income5,82825.7%
Of which — fees & services4,08418.0%
Total revenue22,680100%

Loan Book Mix 2025

SegmentShare of book
Mortgages30.1%
Business17.6%
Real estate14.2%
Commercial13.3%
Capital markets9.4%
Private + small business + other15.4%

Source: FY2025 Annual Report (P1725675-00), approved 02/03/2026. Loans to the public ~NIS 520 billion at year-end 2025.

2 Key Financial Observations

This summary is not a recommendation. It is a factual list of key financial metrics as reported by the bank.

Financial Performance — 3-Year Summary

Metric202520242023
Net interest income (NIS M)16,85216,50915,997
Non-interest income (NIS M)5,8286,5995,181
Total revenue (NIS M)22,68023,10821,178
Operating expenses (NIS M)6,9046,6486,894
Credit-loss provisions (NIS M)4507132,383
Net profit (NIS M)10,2629,7987,027
ROE15.8%16.9%13.7%
NIM — Net Interest Margin2.31%2.44%2.57%
Efficiency Ratio29.3%29.9%32.6%
CET1 capital ratio12.05%12.17%11.66%
LCR (Liquidity Coverage Ratio)127%——

Balance Sheet — YE2025 (NIS B)

Total assets873.0
Loans to the public, net520.0
Public deposits686.9
Equity68.1
Loan-to-deposit ratio73.9%
Credit growth Y/Y (gross)+14.1%
Deposit growth Y/Y+11.1%

Credit Quality 2025

NPL Ratio0.40%
Problem debt1.24%
Cumulative allowance ratio1.30%
Allowance / NPL3.3x
Total cumulative allowanceNIS 6.9B
Provision ratio 20250.09%

Missing / limited data: NIM pre-2023, EPS / ROE for 2021, NPL pre-2023, segment-level profit breakdown (appears in Note 28 to the financial statements).

Net Profit — 5-Year Trend (NIS M)
ROE — Trend (%)
Loan Book Mix by Segment (2025)
Deposit Mix by Segment (2025)
NIM — Net Interest Margin (%)

Steady decline from 2.57% (2023) to 2.31% (2025) amid the Bank of Israel's rate-cutting trajectory. 74% of revenue is NIM-dependent.

Efficiency Ratio — 5-Year Trend (%)

A 16.5-ppt decline over four years — from 45.8% (2021) to 29.3% (2025). Reflects revenue growth running ahead of expense growth.

3 Industry & Competitive Context

Israeli banking — supervised by the Bank of Israel (Supervisor of Banks). An oligopolistic market structure — five banks dominate almost the entire domestic credit and deposit market. Leumi is one of the two largest. In terms of 2025 total assets, Leumi (NIS 873B) is larger than Hapoalim (NIS 766.7B). Entry barriers: a banking licence from the Bank of Israel, Basel III regulatory capital requirements, technology infrastructure, public trust and brand.

BankNet Profit 2025 (NIS M)ROECET1Credit Growth
Leumi (LUMI)10,26215.8%12.05%14.1%
Hapoalim (POLI)9,80215.9%11.98%13.4%
Mizrahi Tefahot (MZTF)5,63017.0%10.24%11.9%
First International (FIBI)2,26016.2%11.10%13.1%

Leumi vs. Hapoalim — distinctions: Leumi leads on balance-sheet size (+13.9%), efficiency (29.3% vs. 34.2%), and credit growth (+0.7 ppt). Hapoalim is similar on ROE (a 0.1-ppt gap). Both are universal banks, without a controlling shareholder, under identical regulation.

Source: 2025 annual reports of each bank.

4 Risk Factors
RiskContext
Interest-rate cycle74% of revenue is interest income. NIM fell from 2.57% (2023) to 2.31% (2025). Further rate cuts could continue to compress the margin. According to bank management — average policy rate assumed at 3.2-3.7% in 2026-2027.
Credit qualityProvisions were low (0.09% of the book) in 2025. If this is a cyclical trough rather than a structural improvement, rising provisions are the downside. 14% credit growth in 2025 may seed later NPL formation.
RegulationCapital requirements may rise (full Basel IV implementation). The Supervisor of Banks may restrict dividend distribution during macro uncertainty.
Geopolitics — IsraelThe security situation drove 2023 provisions (NIS 2.38B for the year). Israel's sovereign rating affects foreign-funding cost. Moody's Baa1 stable (upgrade 01/2026), S&P A stable, Fitch A negative.
Valley (USA) exposureLeumi holds a position in Valley National Bank following the 01/04/2022 merger. Impairments in 2023 and 2024 evidence exposure to the US regional-banking sector.
Credit concentration — real estate30.1% of the book is mortgages, 14.2% is real estate — a combined 44.3% exposure to the Israeli real-estate market.
Digital competition"One Zero" and other digital banks challenge the retail segment. Leumi's internal response is Pepper.
Cyber and operational riskOperational risk in any large bank. The bank reports meaningful investment in cybersecurity and infrastructure.

Items on watch: Bank of Israel rate policy in 2026, NIM trajectory (stabilisation at 2.2-2.3% or further decline), credit-growth pace, Valley National Bank results.

5 Analytical Lens — The Questions We Ask
In professional company analysis, the question is not "is this good?" but rather "through which lenses must this company be examined so that we do not miss what matters most?" At Bakshi Finance, every analysis passes through six lenses.

This framework is intended to structure analysis, not to produce an investment conclusion.
Growth
The loan book grew 14.1% in 2025 (from NIS 455.5B to NIS 520B). According to bank management, the 2026-2027 target is 8-10%. How much of that growth comes from mortgages (30.1% of the book) versus other segments? Is it genuine demand or the product of looser standards? And what does the parallel 11.1% deposit growth mean for the funding base?
Profitability
ROE reported of 15.8% versus normalised ROE of 17.9% — a 210 bps gap. What share of profitability is cyclical (high-rate environment 2022-2025) versus structural? NIM fell from 2.57% to 2.31% in two years — what is the effect of future repricing on interest income if rates continue to decline?
Leverage — Capital
CET1 of 12.05% — a 181 bps buffer above the regulatory minimum (10.24%) and 120 bps above the internal target (10.85%). Leverage ratio 6.82%, LCR 127%, NSFR 118%. Is the buffer surplus capital that will be distributed, or a cushion the regulator may require be retained?
Competitive Position
Leumi is one of the two largest banks in Israel. How exactly does it differ from Hapoalim? Efficiency of 29.3% vs. 34.2% — is this a durable structural advantage or a gap that will close? What is the value of a broad deposit base (NIS 686.9B, 33% from households) in a declining-rate environment?
Management Quality
Management's 2026-2027 targets: net profit NIS 10-12B, ROE 14.5-16%, payout 50-65%. This signals a planned normalisation from the exceptional 2025 levels. How consistent is management in meeting targets? How is capital allocated in the absence of a controlling shareholder?
Business Complexity / Risk
Where would a simplistic analysis of an Israeli bank go wrong? How does one treat the Valley (USA) exposure, which is not consolidated but affects impairments? What does the "no controlling shareholder" structure since 2012 mean for decision-making? How to address the dual sensitivity — interest rates and Israeli geopolitics?
These are the questions. The specific answers for Leumi are woven through the analysis and explored in depth in "How to Think About This Company".
The same six questions are asked of every company on the site — what varies is the answers, not the instrument.
6 Scenario Framework
Scenarios are descriptive, not predictive. They outline possible conditions, not expected outcomes.
These scenarios carry no probability assessment, no preferred direction, and no expectation regarding which, if any, will materialise. They describe conditions only — no price targets, no investment conclusion.
Constructive Scenario — if the following conditions hold:

The Bank of Israel policy rate stays in the 3.2-3.7% range (management's assumption), credit growth continues at 8-10% (management's target), NIM stabilises around 2.2-2.3%, credit quality holds (NPL below 0.5%, provisions below 0.15% of the book), and the capital buffer (CET1 above 12%) supports continued distribution at a 55-65% payout ratio. Under these conditions, according to bank management, net profit remains in the NIS 10-12B range.

Base Scenario — if current trends continue:

Rates decline gradually (NIM continues to drift to 2.1-2.2%), credit growth moderates to 8-10%, reported ROE converges to the 14.5-16% range of management's stated target, provisions rise modestly toward 0.15-0.20% of the book (normalisation from the cyclical trough), and distribution stays at 50-58%. Net profit ranges between NIS 9.5B and NIS 11B.

Adverse Scenario — if the following risks materialise:

A sharp rate decline beyond management's assumptions, NIM falling below 2%, the 14% credit growth of 2025 proving to be a "step-change" whose provisions revert toward 0.4-0.6% of the book (as in 2023), a material geopolitical event impacting domestic activity, further impairments on Valley, or regulatory restrictions on distribution. Under these conditions, ROE falls below 13% and the capital buffer compresses.

Scenarios describe conditions, not forecasts. There is no preferred direction, no probability assessment, no price target, and no investment conclusion expressed in this framework.
7 How to Think About This Company
Bank Leumi is neither a growth story nor a technology story. It is one of the pillars of the Israeli banking oligopoly, and its earnings-generation engine rests on three factors: balance-sheet scale (NIS 873B), sustainable credit growth, and disciplined operating costs. Any analysis of the bank must begin with the understanding that it operates inside a strong regulatory framework — the Bank of Israel sets capital requirements (CET1 minimum 10.24%), liquidity requirements (LCR 100%+), and macro-stability capital buffers. That framework limits both risk and return.
The critical variables to track are four. First — NIM (Net Interest Margin). The metric fell from 2.57% (2023) to 2.44% (2024) to 2.31% (2025). That is not a one-off, it is a pattern. The Bank of Israel is in a slow rate-cutting cycle, and 74% of the bank's revenue is interest income. On a balance of ~NIS 520B in credit, one point of margin equates to ~NIS 5B of annual revenue. Second — credit quality. NPL fell from 0.85% (2023, a war year) to 0.40% (2025). Provisions dropped from NIS 2.38B to NIS 0.45B over those two years. The open question: is this a cyclical trough, or is the book genuinely healthier after the 2023 clean-up? Third — 14.1% credit growth. This is dramatic growth and raises the classic question: at what price? Fourth — 29.3% efficiency ratio, among the lowest in the sector — but low efficiency in a high-margin environment can be a biased metric.
Where the analysis may go wrong. First error — treating ROE of 15.8% as a "trend" number. The bank itself notes normalised ROE of 17.9% — a gap of more than 200 bps. Netting out internal capital requirements above the regulatory floor, the bank sustains very high double-digit returns. Second error — viewing the NIS 10.26B profit as a "running" outcome. Part of 2024's profit was driven by a capital gain from selling headquarters buildings (~NIS 830M), and parts of 2022-2024 were affected by the Valley transaction (merger gain followed by impairments). The bank consistently presents "ex-Valley" figures — and the reader must understand the gap. Third error — comparing Leumi to Hapoalim on a single metric. On ROE they are close (15.8% vs. 15.9%). On efficiency Leumi is better (29.3% vs. 34.2%). On credit growth Leumi is faster (14.1% vs. 13.4%). The full picture is a composite.
Regulatory and geopolitical context — unique to Israel. The regulatory CET1 minimum is 10.24%, the internal target is 10.85%, and actual is 12.05% — a 181 bps buffer. That buffer is what enables the NIS 5.9B distribution (58% of profit) in 2025. Leumi (and all Israeli banks) are sensitive to two factors that do not apply to foreign banks: (a) the security situation — a war disrupting the economy increases provisions (see 2023); (b) Israel's sovereign rating — Moody's upgraded to Baa1 stable (30/01/2026), S&P to A stable (07/11/2025), while Fitch remains A negative. Israel's rating directly affects the banks' foreign-funding cost. According to bank management, the 2026-2027 targets (ROE 14.5-16%, growth 8-10%) are below 2025 levels — a signal of planned normalisation. Professional analysis of Leumi asks: (a) how much of ROE is cyclical versus structural, (b) will the efficiency ratio survive a normal-rate environment, (c) what happens to NPL if the 14%/year growth cadence continues, (d) what is the signal in the NIS 1.5B buyback.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
8 Sources & Data
#SourceTypeNote
1FY2025 Annual Report — Board of Directors' Report & Financial Statements (P1725675-00)Official — TASE MayaApproved 02/03/2026 | 404 pages
2Pillar 3 and Risk Disclosures 2025 (P1725675-01)Official — TASE MayaCapital adequacy & risk | 140 pages
3FY2025 Results Presentation (P1725705-00)Official — TASE Maya23 pages
4FY2023 Annual Report (P1580258-00)Official — TASE MayaFor 2021-2023 historical verification
5FY2023 Results Presentation (English) (P1580399-00)Official — TASE MayaFor 2023 data verification | 18 pages

Missing data: NIM pre-2023, EPS and ROE for 2021, NPL ratio pre-2023, segment profit breakdown (present in Note 28 to the financial statements, not extracted here). All figures verified from official TASE Maya PDFs.

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Bakshi Finance | Family Office | All rights reserved 2026

Disclosure — Paragraph 1: The information presented in this document is provided for informational and educational purposes only. It does not constitute investment advice, investment marketing, portfolio management, or a substitute for personalised advice tailored to the client. The firm operates as a Family Office serving qualified investors only. The firm's founder held a licensed investment-advisory practice from 2008 through 2023; the licence is no longer active.

Disclosure — Paragraph 2: Nothing herein constitutes a recommendation to buy, sell or hold any security. This document does not provide a score, a rating, a price target or an investment conclusion. This site does not participate in the investment decision — the decision rests solely with the client.

Disclosure — Paragraph 3: Past performance is not indicative of future results. This framework is intended to structure analysis, not to produce an investment conclusion. Scenarios are descriptive, not predictive.