Bank Hapoalim Reports Slight Profit Decline to NIS 2.5 Billion, Declares NIS 1.24 Billion Dividend

Bank Hapoalim concluded the second quarter of the year with a net profit of 2.49 billion shekels, marking a slight 2% decrease compared to 2.54 billion shekels in the same quarter last year. This profit reflects a return on equity of 15%, down from 16.7% in the previous year’s quarter. Under CEO Yadin Anavi, the bank announced it will distribute 50% of its net profit to shareholders, totaling 1.24 billion shekels, which includes a cash dividend of 995 million shekels and 249 million shekels allocated for a share buyback program.

The bank’s credit portfolio grew by 6.6% since the start of the year, reaching a balance of 536 billion shekels. Growth was driven by a 10% increase in large business loans and a 9.6% rise in medium business loans, while housing credit increased by 3.4%. Small business credit grew by only 2.1%. Net interest income for the quarter was 4.82 billion shekels, a marginal increase of about 0.5% year-over-year, with credit growth offsetting lower interest rates, compressed credit margins, and reduced income from linkage differentials due to a lower index compared to last year.

Fee income remained stable at 1.14 billion shekels, with a 21% rise in securities-related fees offset by a decline in currency exchange income. Credit loss expenses slightly decreased to 298 million shekels from 302 million shekels, reflecting reduced collective provisions amid stable risk indicators. The non-performing loan ratio remained steady at 0.53%, though net write-offs increased to 0.14% from 0.08% year-over-year.

On the funding side, public deposits reached 618 billion shekels, with non-interest-bearing current account balances growing to 177 billion shekels since the start of the year. The bank’s wage expenses dropped by 7.3% to 1.08 billion shekels, attributed to lower bonus provisions and stable ongoing salary costs. The efficiency ratio improved to 30.6% from 32.8% in the same quarter last year.