Mizrahi Tefahot Bank Ltd.

The positive outlook on Mizrahi reflects our expectation that the bank's creditworthiness will benefit from the ongoing integration of Union Bank, and that its business and financial profiles are set to improve with limited asset quality problems and a strong capital buffer. We could raise the ratings on the bank over the next 12-24 months if we concluded that Mizrahi could maintain its solid risk profile and strong capitalization while implementing its new strategic plan and successfully integrating Union Bank. An upgrade would hinge on the bank's accelerated growth in new segments and construction not bringing additional risks and remaining supportive of its overall capitalization. We will monitor the evolution of asset quality, efficiency, and profitability metrics in comparison with

...The Israeli economy's resilient performance and current banking environment provide upside to Mizrahi Tefahot Bank Ltd. (Mizrahi)'s profitability. S&P Global Ratings' expectation of solid GDP growth of 5.5% in 2022 and 3.5% in 2023, after a modest contraction of 2.2% in 2020 and 8.2% growth in 2021, will sustain Mizrahi's profitability. Specifically, we expect high lending, rising interest rates, and inflation will help the bank reach its 2025 targets--initially set in a more unfavorable environment--of a 14% return on equity (ROE) and below 50% cost to income....

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