Bank Hapoalim posts $830 million profit and steps up shareholder returns
The bank will distribute NIS 1.24 billion ($413 million) through a dividend and share buybacks after credit growth helped sustain earnings.
Bank Hapoalim ended the second quarter with net profit of NIS 2.49 billion ($830 million), compared with NIS 2.54 billion ($847 million) in the corresponding quarter last year, a slight decrease of 2%. The profit reflected a return on equity of 15%, compared with 16.7% in the corresponding quarter.
The bank, managed by Yadin Antebi, will distribute 50% of its net profit, totaling NIS 1.24 billion ($413 million). The distribution consists of a cash dividend of NIS 995 million ($332 million), alongside an allocation of NIS 249 million ($83 million) for the continuation of the share buyback program.
The bank's credit portfolio grew 6.6% since the beginning of the year to NIS 536 billion ($178.7 billion). Growth was led by the large-business portfolio, which expanded 10%, and the medium-sized business portfolio, which grew 9.6%. The housing credit portfolio increased 3.4% since the beginning of the year, while credit to small businesses grew by just 2.1%.
Bank Hapoalim's net interest income amounted to NIS 4.82 billion ($1.61 billion) in the second quarter, up roughly 0.5% from the corresponding quarter. Growth in the credit portfolio offset the impact of the lower interest-rate environment, the erosion of credit spreads and lower income from linkage differences due to a lower inflation index compared with last year.
Fee income remained stable at NIS 1.14 billion ($380 million), with fees from securities activities increasing by about 21%. That increase was offset by a decline in income from foreign-currency conversion differences.
Credit-loss expenses amounted to NIS 298 million ($99 million) in the quarter, compared with NIS 302 million ($101 million) in the corresponding quarter. The decline was attributed to a reduction in the group's provision following stability in some of its risk indicators.
The proportion of credit that is non-performing or more than 90 days past due remained stable at 0.53%. However, the rate of net accounting write-offs increased to 0.14%, compared with 0.08% in the corresponding quarter.
On the funding side, public deposits reached NIS 618 billion ($206 billion). Non-interest-bearing current-account balances have also increased since the beginning of the year, reaching NIS 177 billion ($59 billion).
Bank Hapoalim's salary expenses fell 7.3% in the second quarter to NIS 1.08 billion ($360 million). The decline was attributed to a lower provision for bonuses, while underlying salary expenses remained stable.
The bank's efficiency ratio improved to 30.6% in the second quarter, compared with 32.8% in the corresponding quarter last year.
