The Banking Control Authority in Israel said today, Monday, that it is still too early to give the green light to commercial banks to increase profit distributions, given the constant economic fog cause due to the war in Gaza.
With the beginning of the war that was ignited by the Islamic Resistance Movement (Hamas) attack on Israel in October 2023, the central bank asked the lenders to postpone large payments of profits so that they can provide adequate credit.
The banks responded by reducing the distributions to between 15 and 20% of the net quarterly profits after they were 50% before the war.
The banks were then allowed to raise the percentage to 40%, and most banks pay 30% of net profits in the form of profits and another 10% in the form of shares.
Inflation
In a context related to the pressure of the war on the economy of Israel, the annual inflation rate in Israel during April increased to 3.6%, according to the Israeli Central Statistics Department last Thursday, under the pressure of the war, which may mostly discourage policymakers from reducing interest rates soon, and the inflation rate last March was 3.3%.
Last April, the inflation rate exceeded 3.1% in a Reuters poll, and remained higher than the annual target by the government, which ranges between 1 and 3%.
https://www.youtube.com/watch?v=0fakihnzv4c
Government officials have largely blamed the exhibition problems related to the war in high inflation during the past year, even with the decline in price pressures globally, and the central bank believes that the demand also contributes to keeping prices high.
The annual inflation was 3.8% last January, its highest level since September 2023, and the central bank expected last April to reach 2.6% for 2025.
On a monthly basis, the consumer price index increased by more than 1.1% in April compared to March, due to the high costs of transportation, entertainment, fresh fruits, clothes and housing.
