Bank Hapoalim Reports 9% Profit Drop in Q2 2026 Amid Interest Rate Cuts and Rising Credit Losses

Bank Hapoalim reported a 9% decline in net profit for the second quarter of 2026, totaling 583 million shekels compared to the same period last year. The profit drop was primarily driven by a nearly 100 million shekel decrease in net interest income, following a reduction in the national interest rate from 4.5% to 3.5%. Credit losses surged by 240% to 38 million shekels, largely due to increased provisions for borrowers facing difficulties and general credit portfolio reserves amid economic uncertainty and ongoing conflict.

Despite these challenges, the bank saw a significant rise in fee income, which increased by almost 50 million shekels to 482 million shekels. The most notable growth was in capital market-related fees, including trading and client portfolio management, which rose 22% to 292 million shekels. This increase was attributed to expanded capital market activity and higher trading volumes.

Loans to the public grew by 20.5% to 164 billion shekels, while customer assets climbed 21% to 1.2 trillion shekels, reflecting gains in the capital markets over the past year. Bank Hapoalim is the fifth-largest bank in Israel’s banking system, controlled by FIBI Holdings, which owns 48% of its shares. FIBI is in turn controlled by Zedek Bino, holding 28.5%. The bank’s market capitalization reached 24 billion shekels, with its stock rising 10% over the past 12 months, slightly underperforming the 13% increase of the TA-Finance Index in which it is included.