May 22, 2014 / 6:07 AM / 3 years ago

Israel's Bank Leumi Q1 profit gain tops estimates

JERUSALEM, May 22 (Reuters) - Bank Leumi, Israel's second-largest lender, reported a 10 percent rise in quarterly profit as it recorded income in its provision for credit losses.

Leumi said on Thursday it earned 625 million Israeli shekels ($179 million), up from 570 million a year earlier.

It posted income in respect to credit losses of 51 million shekels compared with an expense of 73 million in the first three months of 2013. Net interest income slipped 0.3 percent to 1.757 billion shekels.

The bank had a gain of 70 million shekels from the sale of Partner Communications shares, while it recorded a gain of 180 million the prior year.

Leumi was forecast to earn 514 million shekels and record a credit loss expense of 114 million, according to a Reuters poll of analysts.

It said the bank was continuing an efficiency programme that further lowered salary expenses.

Leumi's ratio of Tier I capital to risk elements in Basel III terms rose to 9.41 percent from 9.2 percent at the end of 2013 - above a mandate of 9 percent by the start of 2015.

During the quarter, Leumi's share of credit to households and small businesses grew 0.9 percent from the end of 2013, while the share of commercial and corporate credit declined 0.7 percent.

$1 = 3.4928 Israeli Shekels Reporting by Steven Scheer

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