The bank will provide a further NIS 460 million (about $131.5 million) for claims relating to its dealings with US taxpayers.
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Bank Leumi (TASE: LUMI) reports today that it is at an advanced stage of negotiations with the US Department of Justice on the question of the group’s activity vis-a-vis customers liable to pay US taxes in the period 2010-2012.
The bank stated in its financial report for the first quarter of this year that intensive negotiations were taking place between the Leumi group and its representatives and the US authorities. This morning, the bank said that it was moving towards a settlement with the US Department of Justice in line with proposals made by the latter.
In the light of the updated assessment of the amount of the expected settlement, the bank will increase its provision relating to the matter by NIS 460 million (about $131.5 million), so that the total provision will reach NIS 950 million (about $271.5 million).
The extra provision will be booked by Leumi in the second quarter, which will of course materially affect its results for the quarter.
For the first quarter, Bank Leumi reported a net profit of NIS 625 million (about $178.5 million), compared with NIS 570 million (about $163 million) in the first quarter of 2013, representing a rise of 9.6%. The rise was mainly thanks to a NIS 124 million reduction in the credit losses item and a smaller tax provision.
Published by Globes [online], Israel business news – www.globes-online.com