Bank Hapoalim Reports Slight Profit Decline to NIS 2.5 Billion, Declares NIS 1.24 Billion Dividend
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Bank Hapoalim reported a slight 2% drop in Q2 net profit to 2.49 billion shekels and will distribute 1.24 billion shekels to shareholders. The bank’s credit portfolio grew 6.6%, driven by large and medium business loans, while net interest income rose marginally. Efficiency improved as wage expenses declined and non-performing loans remained stable.
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- Bank Hapoalim’s Q2 net profit fell 2% to 2.49 billion shekels compared to last year.
- The bank will distribute 50% of net profit, totaling 1.24 billion shekels to shareholders.
- Credit portfolio grew 6.6% to 536 billion shekels, led by large and medium business loans.
- Net interest income rose slightly by 0.5% to 4.82 billion shekels despite lower interest rates.
- Non-performing loans remained stable at 0.53%, while net write-offs increased to 0.14%.
- Wage expenses fell 7.3%, improving the bank’s efficiency ratio to 30.6%.
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.
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