Net Profit totaled NIS 699 million
Return on Equity of 8.3%
The Bank reached required Capital Targets
Cash Dividend Payout increased to 30%
TEL AVIV, Israel, Nov. 17, 2016 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the third quarter ended September 30, 2016.
Third Quarter 2016 Financial Highlights:
- Net profit totaled NIS 699 million compared with a profit of NIS 802 million in the same quarter last year. The decrease in profit stemmed mainly from the provision recorded by the Bank with respect to the investigation by US authorities, in the amount of about NIS 255 million.
- Return on equity reached 8.3% in the third quarter of 2016, compared with 10.4% in the same quarter last year.
- Tier 1 Capital Ratio stood at 10.81% on September 30, 2016, compared with 9.63% at December 31, 2015. The Bank exceeds capital adequacy targets required by the Bank of Israel.
- Total Capital Adequacy Ratio stood at 15.02% on September 30, 2016, compared with 14.36% at December 31, 2015.
- Quarterly Dividend - The Bank's Board of Directors announced an increase of the cash dividend payout, to a rate of 30% of net profit, in line with the approval by the Supervisor of Banks. The Bank will distribute the amount of NIS 210 million from its third quarter 2016 earnings.
Main developments in the financial statements for the third quarter of 2016:
Profit from regular financing activity totaled NIS 2,144 million in the third quarter of 2016, compared with NIS 2,128 million in the same quarter last year.
Net Provision (income) for credit losses totaled income of NIS 118 million (-0.17%) in the third quarter of 2016, compared with a provision of NIS 55 million, (0.08%), in the same quarter last year.
Gross Provision for credit losses, before recoveries, totaled NIS 263 million (0.37%) in the third quarter of 2016, compared with a provision of NIS 342 million (0.50%), in the same quarter last year.
Fees and other income totaled NIS 1,386 million in the third quarter of 2016 compared with NIS 1,354 million in the same quarter last year.
Operating and other expenses totaled NIS 2,445 million in the third quarter of 2016 compared with NIS 2,183 million in the same quarter last year. The increase in expenses stemmed mainly from the update of the bank's provision with respect to the investigation by US authorities, in the amount of about NIS 255 million. On the other hand, salary expenses decreased by 4.4%.
Cost-Income ratio stood at 61.1% at the end of the third quarter of 2016 (excluding expenses related to the Bank Group's activity with US clients) compared with 61.8% in the same quarter last year.
Tier 1 Capital Ratio stood at 10.81% on September 30, 2016, compared with 9.63% at December 31, 2015.
Dividend declared - The Bank's Board of Directors declared a dividend with respect to the third quarter 2016 profits, of approximately NIS 210 million, which amounts to about 15.745 agorot per share. The record date is November 28, 2016 and the date of payment is December 6, 2016.
Contribution to the community - The Bank's employees are involved in a varied and extensive range of community-oriented activities that take the form of social involvement, monetary donations, and large-scale volunteer activities. Bank Hapoalim’s community-oriented activity during the first nine months of 2016 was expressed in a financial value of approximately NIS 36 million.
Developments in Balance Sheet Items:
The consolidated balance sheet as at September 30, 2016 totaled NIS 440.2 billion, compared with NIS 431.6 billion at the end of 2015, an increase of 2.0%.
Net Credit to the public totaled NIS 277.5 billion, compared with NIS 278.5 billion at the end of 2015, a decrease of 0.3%. Lending to retail, small business and commercial customers increased while corporate lending decreased.
Credit to Private Customers in Israel totaled NIS 39.8 billion compared with NIS 39.0 billion at the end of 2015, an increase of 2.2%.
Mortgages in Israel totaled NIS 68.2 billion compared with NIS 66.8 billion at the end of 2015, an increase of 2.2%.
Credit to Small Businesses in Israel totaled NIS 27.2 billion compared with NIS 25.5 billion at the end of 2015, an increase of 6.6%.
Credit to the Commercial segment in Israel totaled NIS 32.4 billion compared with NIS 30.8 billion at the end of 2015, an increase of 5.4%.
Credit to the Corporate segment in Israel totaled NIS 72.6 billion compared with NIS 79.2 billion at the end of 2015, a decrease of 8.3%.
Deposits from the public totaled NIS 326.2 billion compared with NIS 321.7 billion at the end of 2015, an increase of 1.4%.
Shareholders' Equity totaled NIS 34.1 billion as at September 30, 2016, compared with NIS 33.0 billion at the end of 2015, an increase of 3.3%.
Leverage ratio - defined as the ratio of the capital measurement (Tier 1 capital) to the exposure measurement (total of balance sheet exposures, exposures to derivatives and securities financing transactions, and off-balance sheet items), stood at 7.4% compared to the 6% minimum required by the Supervisor of Banks.
Liquidity coverage ratio – defined as the ratio between the supply of "high-quality liquid assets” to the net expected outgoing cash flow in a stress scenario, stood at 117% at the end of the third quarter of 2016 compared to the Supervisor of Banks' requirement of 100% at the end of 2017.
Conference Call Information
Bank Hapoalim will host a conference call as well as a slide presentation webcast on Thursday, November 17th, 2016 to review the Third Quarter 2016 financial results at 9:00 a.m. U.S. Eastern Time / 2:00 p.m. UK Time / 4:00 p.m. Israel Time.
To access the call, please dial: 1-888-281-1167 in the U.S. and 1-866-485-2399 in Canada or (972) 3-9180685 for international participants. No password is required. The presentation slides, earnings release and the Third Quarter 2016 financial statements are available at the Bank's website, www.bankhapoalim.com, under Investor Relations, Financial Information.
A replay of the conference call will be available beginning at approximately 11:00 a.m. U.S. Eastern Time / 4:00 p.m. UK Time / 6:00 p.m. Israel Time on Thursday, November 17th, 2016 through 11:00 a.m. U.S. Eastern Time / 4:00 p.m. UK Time / 6:00 p.m. Israel Time on Thursday, November 24th, 2016 by telephone at (972) 3-9255918 (international).
The webcast replay will also be available by audio playback on the Bank Hapoalim website at www.bankhapoalim.com, under Investor Relations, Financial Information.
About Bank Hapoalim
Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group has about 238 retail branches, seven regional business centers, a network of 22 business branches and specialized industry relationship managers for major corporate customers.
The Bank Hapoalim Group includes Isracard Ltd, Israel's leading credit card company as well as financial companies involved in investment banking, trust services and portfolio management.
Internationally, Bank Hapoalim operates through branches, subsidiaries and representative offices, in North America, Latin America, Europe, the Far East, and Turkey. In these markets, the Bank is engaged in trade, corporate finance, private banking and retail banking.
Bank Hapoalim is listed on the Tel Aviv Stock Exchange. In addition, a Level-1 ADR is traded "over-the-counter" in New York.
For more information about Bank Hapoalim, please visit us online at www.bankhapoalim.com.
| Principal Data of the Bank Hapoalim Group | (NIS millions) | |||||||||||||
| For the three months ended | ||||||||||||||
| September 30, 2016 | June 30, 2016 | March 31, 2016 | Dec. 31, 2015 | September 30, 2015 | ||||||||||
| Profit and Profitability | ||||||||||||||
| Net financing profit** | 2,196 | 2,586 | 2,209 | 2,106 | 2,179 | |||||||||
| Fees and other income | 1,386 | 1,319 | 1,336 | 1,352 | 1,354 | |||||||||
| Total income | 3,582 | 3,905 | 3,545 | 3,458 | 3,533 | |||||||||
| Provision (income) for credit losses | (118 | ) | (128 | ) | 46 | 147 | 55 | |||||||
| Operating and other expenses | 2,445 | 2,242 | 2,202 | 2,311 | 2,183 | |||||||||
| Net profit attributed to shareholders of the Bank | 699 | 1,117 | 674 | 586 | 802 | |||||||||
| For the nine months ended | For the year ended | |||||||||||||
| September 30, 2016 | September 30, 2015 | Dec. 31, 2015 | ||||||||||||
| Net financing profit** | 6,991 | 6,823 | 8,929 | |||||||||||
| Fees and other income | 4,041 | 4,081 | 5,433 | |||||||||||
| Total income | 11,032 | 10,904 | 14,362 | |||||||||||
| Provision (income) for credit losses | (200 | ) | 328 | 475 | ||||||||||
| Operating and other expenses | 6,889 | 6,479 | 8,790 | |||||||||||
| Net profit attributed to shareholders of the Bank | 2,490 | 2,496 | 3,082 | |||||||||||
| September 30, 2016 | June 30, 2016 | March 31, 2016 | Dec. 31, 2015 | September 30, 2015 | ||||||||||
| Balance Sheet – Principal Data | ||||||||||||||
| Total balance sheet | 440,188 | 440,856 | 434,905 | 431,638 | 422,919 | |||||||||
| Net credit to the public | 277,539 | 278,271 | 279,850 | 278,497 | 275,192 | |||||||||
| Securities | 65,215 | 67,720 | 66,154 | 62,884 | 61,064 | |||||||||
| Deposits from the public | 326,244 | 327,500 | 321,576 | 321,727 | 310,692 | |||||||||
| Bonds and subordinated notes | 35,836 | 36,081 | 36,836 | 34,475 | 35,061 | |||||||||
| Shareholders’ equity | 34,119 | 34,342 | 33,336 | 33,032 | 32,741 | |||||||||
| Net total problematic credit risk | 7,676 | 8,232 | 8,725 | 9,311 | 9,898 | |||||||||
| Of which: net impaired balance sheet debts | 3,526 | 3,745 | 4,134 | 4,265 | 4,780 | |||||||||
| September 30, 2016 | June 30, 2016 | March 31, 2016 | Dec. 31, 2015 | September 30, 2015 | |||||||||||
| Main Financial Ratios | |||||||||||||||
| Net loan to deposit ratio | 85.1 | % | 85.0 | % | 87.0 | % | 86.6 | % | 88.6 | % | |||||
| Net loan to deposit ratio including bonds and subordinated notes | 76.7 | % | 76.5 | % | 78.1 | % | 78.2 | % | 79.6 | % | |||||
| Shareholders’ equity ratio to total assets | 7.75 | % | 7.79 | % | 7.67 | % | 7.65 | % | 7.74 | % | |||||
| Common equity Tier 1 capital ratio to risk-adjusted assets(1) | 10.81 | % | 10.20 | % | 9.74 | % | 9.63 | % | 9.50 | % | |||||
| Total capital ratio to risk-adjusted assets(1) | 15.02 | % | 14.43 | % | 13.94 | % | 14.36 | % | 14.22 | % | |||||
| Liquidity coverage ratio*(2) | 117 | % | 113.0 | % | 105.0 | % | 99.0 | % | 92.0 | % | |||||
| Leverage ratio*(1) | 7.4 | % | 7.3 | % | 7.1 | % | 7.1 | % | 7.2 | % | |||||
| Financing margin from regular activity(3)(4) | 2.08 | % | 2.23 | % | 2.03 | % | 2.03 | % | 2.19 | % | |||||
| Cost-income ratio | 61.1 | % | 57.4 | % | 62.1 | % | 66.8 | % | 61.8 | % | |||||
| Total income to assets(5) | 3.3 | % | 3.6 | % | 3.0 | % | 3.3 | % | 3.4 | % | |||||
| Total expenses to assets(6) | 2.2 | % | 2.1 | % | 1.9 | % | 2.2 | % | 2.1 | % | |||||
| Provision for credit losses as a percentage of the average recorded balance of credit to the public(3) | (0.2 | %) | (0.2 | %) | 0.1 | % | 0.2 | % | 0.1 | % | |||||
| Net return of profit attributed to shareholders of the Bank on equity(3) | 8.3 | % | 13.9 | % | 8.4 | % | 7.3 | % | 10.4 | % | |||||
| Basic net earnings per share in NIS attributed to shareholders of the Bank | 0.52 | 0.84 | 0.51 | 0.44 | 0.60 | ||||||||||
| For the nine months ended | For the year ended | ||||||||||||||||
| September 30, 2016 | September 30, 2015 | Dec. 31, 2015 | |||||||||||||||
| Financing margin from regular activity(3)(4) | 2.1 | % | 2.1 | % | 2.1 | % | |||||||||||
| Cost-income ratio | 60.1 | % | 59.4 | % | 61.2 | % | |||||||||||
| Total income to assets(5) | 5 | % | 3.5 | % | 3.4 | % | |||||||||||
| Total expenses to assets(6) | 3.1 | % | 2.1 | % | 2.1 | % | |||||||||||
| Provision (income) for credit losses as a percentage of the average recorded balance of credit to the public(3) | (0.1 | %) | 0.2 | % | 0.2 | % | |||||||||||
| Net return of profit attributed to shareholders of the Bank on equity(3) | 9.9 | % | 10.6 | % | 9.6 | % | |||||||||||
| Basic net earnings per share in NIS attributed to shareholders of the Bank | 1.87 | 1.88 | 2.32 | ||||||||||||||
* Initial implementation as of April 1, 2015.
** Net financing profit includes net interest income and non-interest financing income (expenses).
(1) For additional information, see the section "Capital Adequacy and Leverage" in the Financial Statement.
(2) For additional information, see the section "Liquidity and Financing Risk" in the Financial Statement.
(3) Calculated on an annualized basis.
(4) Financing profit from regular activity divided by total financial assets after allowance for credit losses, net of non-interest bearing balances in respect of credit cards.
(5) Total income divided by average balances of total assets
(6)Total operating and other expenses, divided by the average balance of total assets.