Bank of America Upgrades Leumi Shares Citing Strong Q2 Results and Resilient Margins

Bank of America has issued a positive outlook on Bank Leumi following the bank's strong second-quarter financial results released Wednesday morning. The U.S. bank upgraded its recommendation to a buy with a target price of 93.5 shekels per share, representing a 24% premium over the stock price before trading opened.

Bank Leumi reported a net profit of 2.8 billion shekels and a return on equity (ROE) of 16.3%, exceeding expectations. Analysts highlighted that the bank is successfully executing its strategic plan, maintaining double-digit ROE alongside capital surpluses. Revenue momentum improved, efficiency reached record levels, and credit growth met management’s targets for the year.

The bank’s net public credit grew approximately 9% in the first half of the year, driven primarily by business lending. Deposit growth remained healthy, supporting balance sheet expansion without significant funding pressures. Non-interest income also rose strongly, contributing to overall revenue growth.

Bank of America noted that Leumi’s net interest margin (NIM) remained resilient, with real financial income (adjusted for inflation) improving year-over-year. Fee income stayed robust, growing 9% annually on a comparable basis. The analysts reaffirmed their buy rating, projecting ROE of 14.4% for 2026 and 15.1% for 2027, comfortably within the bank’s guidance.

They concluded that Bank Leumi offers an attractive combination of above-forecast growth, best-in-class efficiency, asset quality resilience, and capital surpluses, supporting continued profit accumulation and shareholder returns.

Separately, Discount Bank reported a net profit surge to 1.2 billion shekels but plans to distribute lower dividends than competitors. Isracard’s reports also showed growth in Fly Card membership.

The report underscores Bank Leumi’s strong position in the Israeli banking sector amid a healthy economic environment and ongoing credit expansion.