Bank Leumi, one of largest lenders in Israel, has reported a 40% drop in net income in 2020 due to increase in loan loss expenses.

The bank’s net income in 2020 totalled NIS2.1bn ($654m), compared to NIS3.5bn ($1.1bn) reported a year ago.

However, Bank Leumi’s net profit for the fourth quarter of 2020 jumped 20% to NIS890m from NIS742m on a year-on-year basis.

This was attributed to the resumption of loan repayment which was deferred due to the pandemic.

During the Covid-19 pandemic and through to 31 January, Leumi deferred repayments of mortgage loans of NIS900m, as well as NIS1.2bn of loans extended to small and micro-businesses.

Currently, NIS360m of mortgage payments and NIS170m of business loans are still under moratorium.

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Leumi Chairman of the Board Dr Samer Haj Yehia said: “Leumi encountered the coronavirus crisis with financial robustness in terms of capital adequacy and liquidity ratios, a highly-professional and dedicated staff, and technological advancement.

“This helped us assume a leading role in resuscitating the Israeli economy; as early as the first months of the crisis, Leumi provided diverse and creative solutions, adjusted to the changing needs of all its customers.

“The Bank’s employees demonstrated inspiring engagement, devotion and professionalism in providing service and banking solutions for all customers who were facing a complex and changing reality.”

The bank also plans to further expand its digital banking and artificial intelligence capabilities to offer additional products.

Last year, Bank Leumi signed memorandums of understanding (MoUs) with First Abu Dhabi Bank (FAB) and Emirates NBD as Israel and the UAE normalised diplomatic ties.