TEL AVIV, Israel, Aug. 27, 2009 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (LSE:BKHD), today announced their earnings for the second quarter of 2009.
Highlights of the financial statements:
* Net Profit for the second quarter of 2009 totaled NIS 382 million compared with a profit of NIS 42 million in the previous quarter and NIS 594 million in the same quarter last year. * Return on equity for the second quarter of 2009 was 8.3%, on an annualized basis compared with 0.9% in the previous quarter and 13.8% in the same quarter last year. * The Bank's capital adequacy rose to 12.83% at the end of the second quarter of 2009 compared with 10.92% at the end of 2008. This rate exceeds the Board of Director's year-end 2009 objective of 12%. * Tier 1 Capital rose to 7.84% at the end of the second quarter of 2009 compared with 7.44% at the end of 2008. * During the second quarter the Bank raised NIS 3.4 billion in subordinated capital notes in order to improve its capital adequacy ratio.
Main developments in the financial statements for the second quarter of 2009:
Net operating profit for the second quarter of 2009 totaled NIS 380 million compared with a profit of NIS 21 million in the previous quarter and NIS 545 million in the same quarter last year. In the first half of the year, net operating profit totaled NIS 401 million.
Net return of operating profit on equity for the second quarter of 2009 was 8.2%, on an annualized basis, compared with 0.4% in the previous quarter and 12.6% in the same quarter last year. In the first half of the year, net return of operating profit on equity totaled 4.3%.
Profit from financing activity before provisions for doubtful debts, totaled NIS 1,955 million in the second quarter of 2009, compared with a profit of NIS 972 million in the previous quarter and NIS 1,943 million in the same quarter last year. The increase in profit, in comparison to the previous quarter was mainly due to an exceptional accounting loss recorded in the previous quarter, related to the measurement of derivative instruments on a fair-value basis and from an increase in profits in respect of the credit-derivative portfolio during the reporting period.
In the first half of 2009 financing profit totaled NIS 2,927 million compared with a loss of NIS 69 million in the same period last year.
The provision for doubtful debts was made on a conservative basis, with due regard for assessments of the risks in the credit portfolio. In the second quarter of 2009 the Bank recorded provisions totaling NIS 538 million, compared with NIS 314 million in the previous quarter and NIS 252 million in the same quarter last year. In the first half of 2009 the Bank provided NIS 852 million compared with NIS 284 million in the same period last year. The rate of the specific provision to total credit to the public, before the reduction in provisions and the collection of debts written off in the past, reached 0.80%, in the second quarter of 2009, compared with 0.49% in the previous quarter and 0.44% in the same quarter last year.
Operating and other income -- totaled NIS 1,231 million in the second quarter of 2009 compared with NIS 1,162 million in the previous quarter and NIS 1,205 million in the same quarter last year, an increase of 5.9% and 2.2%, respectively. The increase was mainly due to an increase in income from capital market activity, dividends and credit cards fees.
In the first half of 2009 operating profit totaled NIS 2,393 million compared with NIS 2,489 million in the same period last year.
Operating and other expenses totaled NIS 1,890 million in the second quarter of 2009 compared with NIS 1,940 million in the previous quarter and NIS 1,911 million in the same quarter last year, a decrease of 2.6% and 1.1%, respectively. The decrease was mainly due to the decrease in salary expenses which were previously affected by a grant payment under the employees' wage agreement, during the first quarter as well as the cessation of consolidation of Bank Massad and Bank Yahav and voluntary retirement expenses in the same quarter last year.
In the first half of 2009 operating expenses totaled NIS 3,830 million compared with NIS 4,179 million in the same period last year.
Developments in Balance-Sheet Items
The consolidated balance sheet as of June 30, 2009 totaled NIS 302.8 billion, compared with NIS 306.8 billion at the end of 2008.
Credit to the public totaled NIS 216.0 billion, a decrease of 2.8% compared to the end of 2008. The decrease was influenced by the negative growth activity in the Israeli economy during the first half of the year and, as a result, a decrease in levels of credit activity, especially in the corporate sector.
Deposits from the public totaled NIS 228.1 billion compared with NIS 227.0 billion at the end of 2008, an increase of 0.5%. The increase is mainly a result of an increase in deposits in overseas offices.
Shareholder's equity totaled NIS 19,733 million as of June 30, 2009, compared with NIS 18,795 million at the end of 2008, an increase of 5.0%.
Capital adequacy ratio rose to 12.83% at the end of the second quarter of 2009 compared with 10.92% at the end of 2008. Tier 1 Capital rose to 7.84% at the end of the second quarter of 2009 compared with 7.44% at the end of 2008.
The improvement in the capital ratio was achieved mainly by an increase in capital from NIS 30.6 billion at the end of 2008 to NIS 34.9 billion at the end of June 2009. During the first six months of 2009, the Bank raised subordinated notes which serve as Tier 2 capital totaling NIS 2,530 million, of which NIS 1,700 million was raised during the second quarter. In the second quarter of 2009, the Bank also raised a series of capital notes totaling NIS 1,698 million, which were recognized by the Supervisor of Banks as "Upper Tier 2 capital".
About Bank Hapoalim
Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group includes financial companies involved in investment banking, credit cards, trust services and portfolio management. The Group also has holdings in non-banking sectors.
Internationally, Bank Hapoalim operates through 40 branches, subsidiaries and representative offices, in North and Latin America, Europe, the Far East, Turkey and Australia. In these markets, the Bank is engaged in trade, corporate finance, private banking and retail banking.
Bank Hapoalim is the only Israeli Bank listed on both the Tel Aviv and London Stock Exchange. In addition, a Level-1 ADR is traded "over-the -counter" in New York, under ticker BKHYY.
Principal Data of the Bank Hapoalim Group
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Profit and
profitability For the three months ended on
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6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
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Profit (loss)
from financing
activities
before provision
for doubtful
debts 1,955 972 1,242 2,083 1,943
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Operating and
other income 1,231 1,162 1,013 1,153 1,205
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Total income 3,186 2,134 2,255 3,236 3,148
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Provision for
doubtful debts 538 314 765 471 252
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Operating and
other expenses 1,890 1,940 2,008 1,960 1,911
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Operating profit
(loss) 380 21 (393) 384 545
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Net profit from
extraordinary
transactions,
after taxes 2 21 30 57 49
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Net profit (loss) 382 42 (363) 441 594
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Balance Sheet -
Principal Items
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6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
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Total balance
sheet 302,844 305,156 306,847 297,854 300,909
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Credit to the
public 215,973 220,859 222,100 214,296 211,193
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Deposits from
the public 228,136 232,442 226,953 214,802 226,955
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Debentures and
subordinated
notes 22,162 18,967 20,818 20,676 19,111
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Shareholders'
equity 19,733 18,986 18,795 19,030 18,758
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Overall Credit
risk
-Problematic
Debts 17,693 17,558 16,142 15,208 12,416
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Of which:
Non-income
bearing debt 4,274 4,145 4,140 3,870 3,366
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Principal
financial ratios
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6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
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Loan to Deposit
Ratio 94.7% 95.0% 97.9% 99.8% 93.1%
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Shareholders'
equity to total
assets 6.5% 6.2% 6.1% 6.4% 6.2%
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Tier I capital to
risk assets 7.84% 7.55% 7.44% 7.74% 7.49%
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Total capital to
risk assets 12.83% 11.27% 10.92% 11.29% 10.77%
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Cost-Income Ratio 59.3% 90.9% 89.0% 60.6% 61.0%
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Financing
income to
income-yielding
assets 2.72% 1.35% 1.75% 2.94% 2.76%
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Ratio of specific
provision to
total credit to
the public
attributed to
the statement
of profit and
loss(*) 0.80% 0.49% 1.49% 0.76% 0.44%
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Return of
operating profit
(loss) on
equity, net(*) 8.2% 0.4% (7.9%) 8.3% 12.6%
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Return of net
profit (loss)
on equity(*) 8.3% 0.9% (7.3%) 9.6% 13.8%
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Net earnings
(loss) per share 0.29 0.03 (0.29) 0.33 0.46
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(*) Quarterly figures on an annualized basis