Net Profit totaled NIS 2,543 million
Return on Equity of 10.1%
Core Tier 1 Capital rose to 8.9%
TEL AVIV, Israel, April 2, 2013 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the fourth quarter and full year ended December 31, 2012.
Highlights of the 2012 financial statements:
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Net profit totaled NIS 2,543 million in 2012 compared with NIS 2,746 million in 2011.
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Return on equity reached 10.1% in 2012, compared with 12.0% in 2011.
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Total consolidated assets as at December 31, 2012 totaled NIS 376.4 billion, compared with NIS 356.7 billion at the end of 2011, an increase of 5.5%.
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Shareholders' equity totaled NIS 26,755 million as at December 31, 2012, compared with NIS 23,819 million at the end of 2011, an increase of 12.3%.
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Core Tier 1 capital ratio continued its trend of improvement and rose to 8.9% at December 31, 2012 compared with 7.9% at the end of 2011.
- The Bank's total capital adequacy ratio reached 15.7% at the end of 2012, compared with 14.1% at the end of 2011.
Mr. Yair Seroussi, Chairman of the Board of Bank Hapoalim, commented:
In 2012, Bank Hapoalim successfully completed the three-year Strategic Plan that we presented to the market in late 2009. We are proud to report that Bank Hapoalim achieved the goals that we set for ourselves, including:
- Positioning Bank Hapoalim as Israel's leading financial institution;
- Stabilizing the Bank on a path of growth; and
- Achieving attractive returns for shareholders.
Our determined and accurate implementation of the strategic plan served as the foundation of the Bank's success in 2012. During the year, the Bank strengthened its key revenue drivers across all business divisions. At the same time, we conducted a significant streamlining process in order to enhance the Bank's competitive edge and adjust to the increasing level of competition in the banking industry.
It is noteworthy to mention the recognition Bank Hapoalim received as the leading financial institution in Israel. Especially from prestigious industry publications such as The Banker, Euromoney and Global Finance, who selected Bank Hapoalim as the Best Bank in Israel for 2012.
Mr. Zion Kenan, Chief Executive Officer of Bank Hapoalim, said:
The Bank's financial results for 2012, which was a challenging year for the global economy, the Israeli economy and Israeli banking sector, indicate above all that Bank Hapoalim continues to lead the Israeli banking system.
I am proud to say today that we met all our targets in the three-year strategic plan we introduced in late 2009. As part of our successful conclusion to 2012, the Board of Directors approved a new three-year Strategic Plan covering the years 2013 through 2015.
The new three-year plan is based on a thorough analysis of the economic, regulatory as well as business environment and incorporates a sound vision of the changes in the competitive environment in which the Bank operates.
In the face of lingering challenges in the global economy, government debt markets and international financial system, we anticipate that this program will provide the Bank a solid platform upon which to continue to move along a path of steady growth. We will look to achieve this growth while providing a proper return on long-term capital and further consolidating the leadership position of Bank Hapoalim in the Israeli banking system.
Main developments in the Annual Report for the year 2012:
During this period, the Bank successfully culminated the implementation of its three-year strategic plan. Impressive business results and double-digit return on shareholders' equity were achieved, in line with stated goals.
Profit from regular financing activity (excluding one-off and other extraordinary items) in 2012 totaled NIS 7,733 million, compared with NIS 7,542 million in 2011, an increase of 2.5%, mainly as a result of an increase in the volume of activity.
The financial margin from regular activity decreased to 2.22% in 2012, compared with 2.39% in 2011, mainly due to the prevailing low interest rate.
The provision for credit losses totaled NIS 987 million in 2012 compared with NIS 1,202 million in 2011. The rate of provision as a percentage of credit to the public reached 0.39% at the end of 2012 compared with 0.50% at the end of 2011. The decrease resulted from a decline in the provision for debt examined on a collective basis.
Fees and other income totaled NIS 5,222 million in 2012, compared with NIS 5,204 million in 2011, an increase of 0.3%.
Operating and other expenses totaled NIS 8,825 million in 2012, compared with NIS 8,365 million in 2011, an increase of 5.5%, mainly related to higher salary expenses and from an increase in maintenance and depreciation expenses.
Corporate social involvement and contribution to the community - The Bank continues to lead in a varied and extensive range of community-oriented activities that take the form of social involvement, employee-volunteer activities and monetary donations, especially in the areas of education, culture and social welfare. The Bank Group's corporate social activity in 2012 totaled a financial value of approximately NIS 48 million.
Developments in Balance Sheet Items
The consolidated balance sheet as at December 31, 2012 totaled NIS 376.4 billion, compared with NIS 356.7 billion at the end of 2011, an increase of 5.5%.
Net credit to the public totaled NIS 249.2 billion compared with NIS 246.5 billion at the end of 2011, an increase of 1.1%, driven primarily by increases in the retail and commercial segments.
Credit to small businesses totaled NIS 24.3 billion compared with NIS 22.8 billion at the end of 2011, an increase of 6.4%.
Deposits from the public totaled NIS 271.4 billion compared with NIS 256.4 billion at the end of 2011, an increase of 5.8%, primarily related to an increase in core deposits from the retail and commercial segments.
Shareholders' equity totaled NIS 26,755 million as at December 31, 2012, compared with NIS 23,819 million at the end of 2011, an increase of 12.3% mainly stemming from retained earnings.
Core Tier 1 capital stood at 8.9% at the end of 2012 compared with 7.9% at the end of 2011.
Total capital adequacy ratio was 15.7% at the end of 2012 compared with 14.1% at the end of 2011.
About Bank Hapoalim
Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group has over 280 branches, eight regional business centers, a growing network of 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 and Latin America, Europe, the Far East, Turkey and Australia. 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.
For more information about Bank Hapoalim, please visit us online at www.bankhapoalim.com.
| Principal Data of the Bank Hapoalim Group | |||||
| (NIS millions) | |||||
| Profit and Profitability | |||||
| For the year ended December 31 | Change vs. | ||||
| 2012 | 2011 | 2010 | 2011 | 2010 | |
| Net financing income**** | 8,415 | 7,884* | 7,496* | 6.7% | 12.3% |
| Fees and other income | 5,222 | 5,204* | 5,347* | 0.3% | (2.3%) |
| Total income | 13,637 | 13,088* | 12,843* | 4.2% | 6.2% |
| Provision for credit losses | 987 | 1,202 | 1,030 | (17.9%) | (4.2%) |
| Operating and other expenses | 8,825 | 8,365 | 8,291 | 5.5% | 6.4% |
| Net profit attributed to shareholders of the Bank | 2,543 | 2,746 | 2,201 | (7.4%) | 15.5% |
| Balance Sheet – Principal Data | |||||
| December 31 | Change vs. | ||||
| 2012 | 2011 | 2010 | 2011 | 2010 | |
| Total balance sheet | 376,388 | 356,662** | 321,063** | 5.5% | 17.2% |
| Net credit to the public | 249,182 | 246,495 | 225,288 | 1.1% | 10.6% |
| Securities | 52,070 | 34,411 | 31,604 | 51.3% | 64.8% |
| Deposits from the public | 271,411 | 256,417 | 233,965 | 5.8% | 16.0% |
| Bonds and subordinated notes | 35,677 | 32,933 | 27,608 | 8.3% | 29.2% |
| Shareholders' equity | 26,755 | 23,819** | 22,535** | 12.3% | 18.7% |
| Total problematic credit risk*** | 13,284 | 12,354 | 14,269 | 7.5% | (6.9%) |
| Of which: impaired balance sheet debts*** | 6,701 | 7,044 | 8,032 | (4.9%) | (16.6%) |
| Main Financial Ratios | |||||
| 2012 | 2011 | 2010 | |||
| Net loan to deposit ratio | 91.8% | 96.1% | 96.3% | ||
| Net loan to deposit ratio including bonds and subordinated notes | 81.1% | 85.2% | 86.1% | ||
| Shareholders' equity to total assets | 7.1% | 6.7% | 7.0% | ||
| Core Tier I capital to risk-adjusted assets | 8.9% | 7.9% | 8.0% | ||
| Tier I capital to risk-adjusted assets | 9.7% | 8.7% | 8.9% | ||
| Total capital to risk-adjusted assets | 15.7% | 14.1% | 13.9% | ||
| Financing margin from regular activity(a) | 2.22% | 2.39%* | 2.49%* | ||
| Cost-income ratio | 64.7% | 63.9%* | 64.6%* | ||
| Provision for credit losses as a percentage of the average recorded balance of credit to the public(b) | 0.39% | 0.50% | 0.49% | ||
| Net return of profit attributed to shareholders of the Bank on equity | 10.1% | 12.0% | 10.4% | ||
| Basic net earnings per share in NIS attributed to shareholders of the Bank | 1.92 | 2.07 | 1.66 | ||
| Diluted net earnings per share in NIS attributed to shareholders of the Bank | 1.91 | 2.05 | 1.65 | ||
| * The Bank adopted the directive of the Supervisor of Banks concerning the format for statements of profit and loss of banking corporations for the first time on January 1, 2012. The directives were adopted by retroactive implementation, with the exception of the cancellation of unpaid accrued CPI linkage differentials on principal in respect of debts classified as impaired prior to the initial implementation. Accordingly, the data included in the statements of profit and loss for the years 2010 and 2011 were reclassified for adjustment to the new definition, item headings, and presentation method of the current reporting period. For details, see Note 1(C)(5) to the Financial Statements. | |||||
| ** Restated, due to the initial implementation of International Accounting Standard 12, Income Taxes; see Note 1(E)(21) to the Financial Statements. | |||||
| *** Net of the individual allowance and the allowance according to the extent of arrears. | |||||
| **** Net financing income includes net interest income and non-interest income (expenses). Comparison figures for previous years were adjusted to this presentation format. | |||||
| (a) Calculation: Financing profit from regular activity is divided by monetary assets generating financing income. Financing profit from regular activity includes net interest income and non-interest financing income (expenses). | |||||
| (b) In 2010, calculated as the specific provision for the period as a percentage of total credit to the public. | |||||
| Profit and Profitability | |||||
| For the three months ended | |||||
| December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |
| NIS millions | |||||
| Net financing income**** | 2,111 | 2,115 | 2,041 | 2,148 | 1,963* |
| Fees and other income | 1,314 | 1,335 | 1,266 | 1,307 | 1,272* |
| Total income | 3,425 | 3,450 | 3,307 | 3,455 | 3,235* |
| Provision for credit losses | 54 | 286 | 344 | 303 | 363 |
| Operating and other expenses | 2,354 | 2,249 | 2,118 | 2,104 | 2,197 |
| Net profit attributed to shareholders of the Bank | 652 | 625 | 607 | 659 | 672 |
| Balance Sheet – Principal Data | |||||
| December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |
| NIS millions | |||||
| Total balance sheet | 376,388 | 367,365 | 362,105 | 350,350 | 356,662** |
| Net credit to the public | 249,182 | 249,904 | 248,614 | 244,804 | 246,495 |
| Securities | 52,070 | 53,076 | 40,728 | 36,903 | 34,411 |
| Deposits from the public | 271,411 | 264,490 | 259,668 | 251,576 | 256,417 |
| Bonds and subordinated notes | 35,677 | 36,051 | 35,679 | 34,422 | 32,933 |
| Shareholders' equity | 26,755 | 25,759 | 24,907 | 24,440 | 23,819** |
| Total problematic credit risk*** | 13,284 | 14,187 | 13,398 | 13,993 | 12,354 |
| Of which: impaired balance sheet debts*** | 6,701 | 6,493 | 6,685 | 6,356 | 7,044 |
| Main Financial Ratios | |||||
| For the three months ended | |||||
| December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |
| Net loan to deposit ratio | 91.8% | 94.5% | 95.7% | 97.3% | 96.1% |
| Net loan to deposit ratio including bonds and subordinated notes | 81.1% | 83.2% | 84.2% | 85.6% | 85.2% |
| Shareholders' equity to total assets | 7.1% | 7.0% | 6.9% | 7.0% | 6.7% |
| Core Tier I capital to risk-adjusted assets | 8.9% | 8.5% | 8.3% | 8.2% | 7.9% |
| Tier I capital to risk-adjusted assets | 9.7% | 9.3% | 9.1% | 9.0% | 8.7% |
| Total capital to risk-adjusted assets | 15.7% | 15.1% | 14.8% | 14.7% | 14.1% |
| Financing margin from regular activity(a)(b) | 2.00% | 2.30% | 2.38% | 2.29% | 2.28%* |
| Cost-income ratio | 68.7% | 65.2% | 64.0% | 60.9% | 67.9%* |
| Provision for credit losses as a percentage of the average recorded balance of credit to the public(a) | 0.09% | 0.45% | 0.55% | 0.49% | 0.61% |
| Net return of profit attributed to shareholders of the Bank on equity(a) | 10.3% | 10.2% | 10.2% | 11.3% | 11.9% |
| Basic net earnings per share in NIS attributed to shareholders of the Bank | 0.49 | 0.47 | 0.46 | 0.50 | 0.51 |
| Diluted net earnings per share in NIS attributed to shareholders of the Bank | 0.49 | 0.47 | 0.46 | 0.49 | 0.50 |
| * The Bank adopted the directive of the Supervisor of Banks concerning the format for statements of profit and loss of banking corporations for the first time on January 1, 2012. The directives were adopted by retroactive implementation, with the exception of the cancellation of unpaid accrued CPI linkage differentials on principal in respect of debts classified as impaired prior to the initial implementation. Accordingly, the data included in the statements of profit and loss for the years 2010 and 2011 were reclassified for adjustment to the new definition, item headings, and presentation method of the current reporting period. For details, see Note 1(C)(5) to the Financial Statements. | |||||
| ** Restated, due to the initial implementation of International Accounting Standard 12, Income Taxes; see Note 1(E)(21) to the Financial Statements. | |||||
| *** Net of the individual allowance and the allowance according to the extent of arrears. | |||||
| **** Net financing income includes net interest income and non-interest income (expenses). Comparison figures for periods in 2011 were adjusted to this presentation format. | |||||
| (a) Calculated on an annualized basis. | |||||
| (b) Calculation: Financing profit from regular activity is divided by monetary assets generating financing income. Financing profit from regular activity includes net interest income and non-interest financing income (expenses). | |||||