Net Profit totaled NIS 812 million
Return on Equity of 9.5%
Dividend payment in respect of second quarter profits totaled NIS 325 million
TEL AVIV, Israel, Aug. 15, 2017 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced its financial results for the second quarter ended June 30, 2017.
Key financial highlights for the second quarter of 2017:
- Net Profit - totaled NIS 812 million, compared with a net profit of NIS 767 million in the first quarter of 2017, an increase of 5.9%. Net profit in the corresponding quarter of 2016 amounted to NIS 1,117 million. The relatively high net profit of the corresponding quarter was affected by income derived from the sale of VISA shares, sale of loans, and income in respect of credit losses.
- Return on Equity - reached 9.5%, compared with 9.2% in the first quarter of 2017, and 13.9% in the corresponding quarter in 2016.
- Tier 1 Capital Ratio - totaled 11.35% as at June 30, 2017, compared with 11.01% as at December 31, 2016.
- Total Capital Adequacy Ratio - totaled 15.0% as at June 30, 2017, compared with 15.11% as at December 31, 2016.
- Quarterly Dividend - the Board of Director of the Bank announced it will distribute a dividend in the amount of NIS 325 million, 40% of second quarter profits.
Key developments in the financial statements for the second quarter of 2017:
Profit from regular financing activity totaled NIS 2,313 million in the second quarter of 2017, compared with NIS 2,274 million in the same quarter last year, an increase of 1.7%.
Net provision for credit losses totaled NIS 167 million in the second quarter of 2017, 0.24% of the average credit to the public, compared with an income of NIS 128 million (0.18%) in the same quarter last year.
Gross provision for credit losses, before recoveries, totaled NIS 425 million in the second quarter of 2017, 0.62% of the average credit to the public, compared with a provision of NIS 133 million, 0.19%, in the same quarter last year.
Operating and other income totaled NIS 1,317 million in the second quarter of 2017, compared with NIS 1,319 million in the same quarter last year.
Operating and other expenses totaled NIS 2,185 million in the second quarter of 2017, compared with NIS 2,242 million in the same quarter last year.
Cost income totaled 59.3% for the second quarter of 2017, compared with 61.6% for the first quarter of 2017 and 57.4% for the corresponding quarter last year.
Contribution to the community - The Bank continues to lead in contribution to the community in the form of financial donations, especially in the field of education, culture and welfare. Bank Hapoalim’s donations for the first half of 2017 was expressed in a financial value of approximately NIS 20 million. During this period over 4,000 of the Bank's employees engaged in volunteer work.
Key developments in Balance Sheet items for the second quarter of 2017:
The consolidated balance sheet as at June 30, 2017 totaled NIS 449.7 billion, compared with NIS 445.8 billion at the end of the first quarter of 2017, an increase of 0.9%. Compared with the end of 2016, the balance sheet increased by 0.4%.
Net Credit to the public totaled NIS 272.9 billion, compared with NIS 270.0 billion at the end of the first quarter of 2017, an increase of 1.1%. Compared with the end of 2016, credit to the public increased by 0.4%.
Credit to Private Customers in Israel totaled NIS 41.1 billion, compared with NIS 40.5 billion at the end of the first quarter of 2017, an increase of 1.6%. Compared with the end of 2016, credit to private customers increased by 1.7%.
Mortgages in Israel totaled NIS 71.1 billion, compared with NIS 69.7 billion at the end of the first quarter of 2017, an increase of 2.0%. Compared with the end of 2016, mortgages increased by 3.3%.
Credit to small businesses in Israel totaled NIS 27.6 billion, compared with NIS 27.0 billion at the end of the first quarter of 2017, an increase of 2.3%. Compared with the end of 2016, credit to small businesses increased by 1.2%.
Credit to the commercial segment in Israel totaled NIS 33.3 billion, compared with NIS 32.6 billion at the end of the first quarter of 2017, an increase of 2.2%. Compared with the end of 2016, credit to the commercial segment increased by 3.5%.
Credit to the corporate segment in Israel totaled NIS 65.6 billion, compared with NIS 65.3 billion at the end of the first quarter of 2017, an increase of 0.4%. Compared with the end of 2016, credit to the corporate segment declined by 3.5%.
Deposits from the public totaled NIS 340.8 billion, compared with NIS 337.5 billion at the end of the first quarter of 2017, an increase of 1.0%. Compared with the end of 2016, deposits from the public increased by 0.7%.
Shareholders' Equity totaled NIS 35.5 billion as at June 30, 2017, compared with NIS 34.0 billion at the end of 2016, an increase of 4.1%.
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 7.36% compared with 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 127% at the end of the second quarter of 2017, compared with the Supervisor of Banks' requirement of 100% for the end of 2017.
Conference Call Information:
Bank Hapoalim will host a conference call today at 4:00 p.m. Israel time / 9:00a.m. Eastern time to discuss the results. The call will be accompanied by a slide presentation.
In order to participate, please dial the following numbers, at least ten minutes ahead of the scheduled start time: 1-888-281-1167 toll free from the United States; 0-800-051-8913 toll free from the United Kingdom; or 972-3-9180685 internationally. No password is required.
The call will be accompanied by a slide presentation, which, together with the financial statements, will be available on the Bank's website, www.bankhapoalim.com, under Investor Relations, Financial Information.
Following the conclusion of the call, a replay will also be available by audio playback on the Bank Hapoalim website. The replay of the conference call can also be accessed until August 22, 2017 by calling 1-888-254-7270 toll free from the United States, or 972-3-9255918 internationally.
Please note: The conference call does not replace the need to peruse the immediate reports and the Financial Statements of the Bank, including all the forward-looking information included therein in accordance with Section 32A of the Securities Law, 1968.
About Bank Hapoalim:
Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group has 232 retail branches, six 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. In addition to the activity in Israel, the Bank Group operates abroad, in the private banking segment and in the business sector, mainly in Europe and the United States. 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.
Please note: This release is a translation of the Hebrew release and has been prepared for convenience only. In case of any discrepancy, the Hebrew version will prevail.
Principal Data of the Bank Hapoalim Group
| For the three months ended | For the six months ended | ||||||||||||||
| June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||
| Main profit and loss data (NIS millions) | |||||||||||||||
| Net profit attributed to shareholders of the Bank | 812 | 767 | 1,117 | 1,579 | 1,791 | ||||||||||
| Net financing profit* | 2,369 | 2,255 | 2,586 | 4,624 | 4,795 | ||||||||||
| Net interest income | 2,233 | 2,073 | 2,122 | 4,306 | 4,053 | ||||||||||
| Non-interest income | 1,453 | 1,529 | 1,783 | 2,982 | 3,397 | ||||||||||
| Total income | 3,686 | 3,602 | 3,905 | 7,288 | 7,450 | ||||||||||
| Provision (income) for credit losses | 167 | 107 | (128) | 274 | (82) | ||||||||||
| Operating and other expenses | 2,185 | 2,217 | 2,242 | 4,402 | 4,444 | ||||||||||
| Net earnings per ordinary share (in NIS) | |||||||||||||||
| Basic net earnings per share in NIS attributed to shareholders of the Bank | 0.60 | 0.58 | 0.84 | 1.18 | 1.35 | ||||||||||
| As at | |||||||||||||||
| June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||
| Main balance sheet data (NIS millions) | |||||||||||||||
| Total assets | 449,734 | 445,847 | 448,105 | 440,188 | 440,856 | ||||||||||
| Net credit to the public | 272,949 | 269,982 | 271,957 | 277,539 | 278,271 | ||||||||||
| Securities | 70,499 | 74,894 | 71,449 | 65,215 | 67,720 | ||||||||||
| Deposits from the public | 340,768 | 337,518 | 338,502 | 326,244 | 327,500 | ||||||||||
| Bonds and subordinated notes | 30,736 | 31,171 | 33,560 | 35,836 | 36,081 | ||||||||||
| Shareholders’ equity | 35,458 | 34,909 | 34,047 | 34,119 | 34,342 | ||||||||||
| Net problematic credit risk | 7,469 | 8,018 | 7,600 | 7,676 | 8,232 | ||||||||||
| Net impaired balance sheet debts | 2,522 | 2,749 | 3,110 | 3,526 | 3,745 | ||||||||||
| For the three months ended | For the six months ended | ||||||||||||||
| June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||
| Main performance indicators | |||||||||||||||
| Return of net profit on equity attributed to shareholders of the Bank(1) | 9.51% | 9.22% | 13.91% | 9.26% | 11.00% | ||||||||||
| Return on assets | 0.18% | 0.17% | 0.25% | 0.35% | 0.41% | ||||||||||
| Efficiency ratio – cost-income ratio | 59.28% | 61.55% | 57.41% | 60.40% | 59.65% | ||||||||||
| Financing margin from regular activity(1)(2) | 2.24% | 2.07% | 2.23% | 2.15% | 2.12% | ||||||||||
| Liquidity coverage ratio(1)(3) | 127% | 128% | 113% | ||||||||||||
| As at | |||||||||||||||
| June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||
| Ratio of common equity Tier 1 capital to risk-adjusted assets (4) | 11.35% | 11.21% | 11.01% | 10.81% | 10.20% | ||||||||||
| Ratio of total capital to risk-adjusted assets (4) | 14.99% | 14.90% | 15.11% | 15.02% | 14.43% | ||||||||||
| Leverage ratio(4) | 7.36% | 7.30% | 7.25% | 7.40% | 7.27% | ||||||||||
| For the three months ended | For the six months ended | ||||||||||||||
| Main credit quality indicators | |||||||||||||||
| June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||
| Allowance for credit losses as a percentage of credit to the public | 1.40% | 1.45% | 1.48% | 1.40% | 1.48% | ||||||||||
| Provision for credit losses as a percentage of average credit to the public(1) | 0.24% | 0.16% | (0.18%) | 0.20% | (0.06%) | ||||||||||
| * Net financing profit includes net interest income and non-interest financing income (expenses). | |||||||||||||||
| (1) Calculated on an annualized basis. | |||||||||||||||
| (2) Financing profit from regular activity (see the Report of the Board of Directors and Board of Management, in the section “Material Developments in Income, Expenses, and Other Comprehensive Income”) divided by total financial assets after allowance for credit losses, net of non-interest bearing balances in respect of credit cards. | |||||||||||||||
| (3) For additional information, see the section "Liquidity and Refinancing Risk" to the Condensed Financial Statements. | |||||||||||||||
| (4) For additional information, see the section "Capital, Capital Adequacy, and Leverage" to the Condensed Financial Statements. | |||||||||||||||