Bank Hapoalim Reports 2.1% Profit Decline in Q2 2026 Amid Interest Rate Cuts and New Tax
Bank Hapoalim reported a 2.1% profit decline in Q2 2026 to 2.49 billion shekels, impacted by lower interest rates and a new tax. Credit growth helped sustain income despite a 7% profit drop in the first half of 2026. The bank will distribute dividends equal to half its profits. Other major Israeli banks will release their earnings shortly.
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- Bank Hapoalim's Q2 2026 profit fell 2.1% to 2.49 billion shekels amid interest rate cuts and new tax.
- First-half 2026 profit dropped 7% to 4.6 billion shekels, with a 14% return on equity.
- Credit volume rose 6.6% to 536 billion shekels, supporting financing income.
- Deposits increased 4.3% to 618.1 billion shekels; credit loss expenses remained stable.
- Efficiency ratio improved to 30.6% from 32.8% in the previous quarter.
- Bank will pay dividends of 50% of profits, totaling 1.24 billion shekels.
Bank Hapoalim, under CEO Yadin Anati, opened the 2026 second-quarter earnings season for major Israeli banks by reporting a 2.1% drop in quarterly profit to 2.49 billion shekels. For the first half of 2026, profits fell 7% to 4.6 billion shekels compared to the same period last year. This decline reflects the impact of lower interest rates and the new tax associated with Finance Minister Bezalel Smotrich, which have pressured the bank's profitability.
Despite the profit decrease, Bank Hapoalim saw a 6.6% increase in credit activity, with total credit volume rising to 536 billion shekels, helping to sustain its financing income. Deposits also grew by 4.3% to 618.1 billion shekels. The bank maintained reasonable credit loss expenses at around 300 million shekels and improved its efficiency ratio to 30.6%, down from 32.8% in the previous quarter. The bank's equity totaled 67.1 billion shekels, yielding a 14% return on equity for the half-year period.
The bank announced it will distribute dividends amounting to 50% of its profits, totaling approximately 1.24 billion shekels. The results from Bank Hapoalim are seen as indicative of trends expected in the upcoming reports from other major Israeli banks. Later on August 12, Bank Leumi and the International Bank will release their quarterly results, with Bank Leumi expected to report the highest profits in the banking sector. Bank Discount is scheduled to publish its results on August 13, likely showing the lowest return on equity at around 12%.
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