1

Financial Statements

31 December 2008

Financial StatementsDecember 2017

2

Disclaimer

•This document has been prepared by Mizrahi-Tefahot Bank Ltd (UMTB) solely for use at the company's presentation.

The information contained in this document constitutes information from the bank's 2017 annual and/or quarterly reports and/

or immediate reports, as well as the periodic, quarterly and annual reports and/or immediate reports published by the bank in

previous years.

•Accordingly, the information contained in this document is only partial, is not exhaustive and does not include the full details

regarding the bank and its operations or regarding the risk factors involved in its activity and certainly does not replace the

information included in the periodic, quarterly or immediate reports published by the bank. In order to receive the full picture

regarding the bank's 2017 annual and/or quarterly reports, the aforesaid reports should be perused fully, as published to the

public.

•None of the company, or any of their employees or representatives shall have any liability whatsoever (in negligence or

otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection

with this document.

•The bank's results in practice may be significantly different from those included in the forecasting information, as a result of

a large number of factors, including, inter alia, changes in the domestic and global equity markets, macro-economic changes,

geo-political changes, legislation and regulation changes, and other changes that are not under the bank's control, which

may lead to the estimations not realizing and/or to changes in the business plans.

•The forecasting information may change subject to risks and uncertainty, due to being based on the management's

estimations regarding future events, which include, inter alia: global and local economic development forecasts, particularly

regarding the economic situation in the market, including the effect of macro-economic and geo-political conditions;

expectations for changes and developments in the currency and equity markets; forecasts related to other various factors

affecting exposure to financial risks; forecasts with respect to changes to borrowers' financial strength, public preferences,

changes in legislation and the provisions of regulators, competitors' behavior, the status of the bank's perception,

technological developments and human resources developments.

•This document does not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation of any kind

regarding any security or any interest in security.

3

Continuous loan growth

Average annual growth rate 7.1%

128,651

138,565

147,569

159,204

171,341

181,118

2012 2013 2014 2015 2016 2017

Credit to the public

NIS mil

4

Credit growth in all significant segments

Loans to the public (NIS mil)

2017 2016 % of change

Housing loans 119,557 114,076 4.8%

Households and Private banking

19,943 18,676 6.8%

Small and micro businesses

16,716 15,122 10.5%

Medium businesses 5,779 4,785 20.8%

Large businesses and Institutional investors

16,007 15,459 3.5%

Overseas operations 3,116 3,223 (*3.3%)

Total 181,118 171,341 5.7%

Business segments lead the growth in accordance with the strategic plan

* The decrease is due to exchange rates differences

5

Credit to the public - growing market share

16.0%

17.0%17.3%

17.7%

18.6%18.8%

2012 2013 2014 2015 2016 3Q2017

UMTB’s market share in credit to the public

3Q2017

6

Growing market share in all business segments – in

accordance with the strategic plan

8.4%

7.5%

8.9%

8.5%

7.6%

9.5%

עסקים קטנים וזעירים עסקים בינוניים עסקים גדולים

30.9.2016 30.9.2017

Medium businessesSmall and micro businesses Large businesses

7

Continuous deposit growth

128,081

141,244

152,379

162,380

178,252

183,573

2012 2013 2014 2015 2016 2017

Deposits from the publicNIS mil

Average annual growth rate 7.5%

8

UMTB continue to increase its market share in

deposits

13.8%

15.0%15.2% 15.1%

15.6%

15.9%

2012 2013 2014 2015 2016 3Q2017

UMTB’s market share in deposits from the public

3Q2017

9

…even more significant growth in market share of core

deposits

11.3%

11.9%

12.5%

13.8%

14.7%

15.1%

2012 2013 2014 2015 2016 3Q2017

UMTB’s market share in deposits from the public (excluding Institutional investors)

3Q2017

10

Double digit growth in financing revenues from current

operations both Q/Q and Y/Y

1,018

1,140

4Q2016 4Q2017

Financing revenues from current operations

12.0%

3,876

4,363

2016 2017

Financing revenues from current operations

12.6%

11

Financing revenues from current operations continue

to grow (NIS m)

849854

898909

922

946

990

1,018

1,047

1,071

1,105

1,140

1Q

201

5

2Q

201

5

3Q

201

5

4Q

201

5

1Q

201

6

2Q

2016

3Q

201

6

4Q

201

6

1Q

201

7

2Q

201

7

3Q

2017

4Q

201

7

12

Growth in financing revenues in all business segments

Financing revenues (NIS m)

2017 2016 % of change

Housing loans 1,311 1,100 19.2%

Households and private banking

1,202 1,083 11.0%

Small and micro businesses

895 781 14.6%

Medium businesses 206 187 10.2%

Large businesses and institutional investors

574 551 4.2%

Overseas operations 169 158 7.0%

13

Mortgages –balance and revenues*

* Operating segments in conformity with management approach.

Note 12 to quarterly reports, Note 29 to annual reports

244249

262275

215235

Total balance

(average)(NIS, bil)

Total interest revenues, net

(NIS, mil)

284

100102

105

108109

111 112

114115

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

98

3Q

15

307

14

Ensuring high quality underwriting of mortgage loans

3538.4

35.433.93634.7

53.859.1

65

5252.247.2

201720162015201420132012

Mortgage initiations (system)(NIS bil)UMTB’s market share (%)

54.6%

32.6%

1.59%

Main risk parameters in mortgages (system)

Average LTV*

Average payment to

income

Rate of mortgages

in arrears* ** out of

the total mortgage

portfolio

* LTV and payment to income for the period 4-12/2011

compared to 1-12/2017. Mortgages in arrears 12/11

compared to 12/17.** Over 90 days.

20172011*

49.2%

26.2%

0.77%

15

177184

187

100

105

110

115

120

125

130

135

140

145

150

125

135

145

155

165

175

185

195

2015 2016 2017מספר סניפים No. ofר"אלפי מbranches

Square meters

Opening branches and reducing total square meters

Continue to open branches, while optimizing utilization

of space of branches and headquarter

16

Increasing equity base (NIS mil)

Average annual growth rate 9.4%

8,7309,681

10,79711,847

12,714

13,685

2012 2013 2014 2015 2016 2017

Average annual growth of 1 billion NIS

17

Double digit ROE despite dramatic increase in equity

and extremely low interest rate

In black – Bank of Israel interest rate at the end of the period

ROEEquity(NIS mil)

13.1%

11.8%

10.6%10.0%

10.2% 10.2%

8,730

9,681 10,797

11,847

12,714

13,685

7,000

8,000

9,000

10,000

11,000

12,000

13,000

0%

2%

4%

6%

8%

10%

12%

14%

16%

2012 2013 2014 2015 2016 2017

0.25%

1%

2%

0.1%0.1%0.1%

18

Record high net profit -

an additional leap forward compared to previous years

1,0291,060

1,0831,092

1,134

1,266

1,347

2011 2012 2013 2014 2015 2016 2017

19

Record high dividend distribution

120

0 0

75

0

122

190

404

2010 2011 2012 2013 2014 2015 2016 2017

Dividend distribution for the relevant period (NIS mil)

20

In 2017 - competition in the market became more polar

Hybrid banking -

personal banking with technological solutions Total digital -

It’s all about technology

21

Financial results

22

Net profit (NIS mil)

23

Net profit (NIS mil)

24

Net profit - ROE

25

Net profit - ROE

26

Equity (NIS bil)

27

Loans to the public (NIS bil)

28

Deposits from the public (NIS bil)

29

Dividends (NIS mil)

30* Including interest revenues net, and non interest revenues

Total revenues (NIS mil)

31

Financing Revenues (NIS mil)

Rate of

change20172016

4,3473,778Interest revenues, net

136295Non-interest financing revenues

10.14,4834,073Total financing revenues

Less:

32(48)Linkage differentials with respect to CPI position

4340Revenues from collection of interest on troubled debt

4372Gain from debentures

2133Effect of accounting treatment of derivatives at fair

value and others

120197Total effects other than current operations

12.64,3633,876Total financing revenues from current operations

32

0.13%0.12%

0.11%

2015 2016 2017

Provisions / loans to the public

33

Capital adequacy