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Bank Hapoalim Announces Second Quarter 2014 Financial Results

Net Profit totaled NIS 783 million
Return on Equity of 10.8%
Basel 3 Tier 1 Capital rose to 9.5%
Cash Dividend Payout of NIS 119 million to be paid from Second Quarter 2014 Net Profit

TEL AVIV, Israel, Aug. 14, 2014 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the second quarter ended June 30, 2014.

Second Quarter 2014 Financial Highlights:

  • Net profit totaled NIS 783 million compared with a profit of NIS 655 million in the same quarter last year.
  • Return on equity reached 10.8%, compared with 9.9% in the same quarter last year.
  • Tier 1 Capital Ratio, in Basel 3 terms, stood at 9.53% at the end of the second quarter 2014, compared with 9.15% at January 1, 2014.
  • Total Capital Ratio, in Basel 3 terms, as at June 30, 2014 was 15.0% compared with 14.7% on January 1, 2014.
  • Quarterly Dividend - The Bank's Board of Directors approved the continuation of the quarterly cash dividend distribution, at a rate of approximately 15% of net profit, from its second quarter 2014 earnings in the amount of NIS 119 million.

Main developments in the financial statements for the first quarter of 2014:

Profit from regular financing activity totaled NIS 1,997 million in the second quarter of 2014, compared with NIS 1,864 million in the same quarter last year.

The financial margin from regular activity totaled 2.31% in the second quarter of 2014, compared to 2.16% in the same quarter last year.

Provision for credit losses in the second quarter of 2014 recorded income of NIS 3 million, compared with an expense of NIS 301 million in the same quarter last year.

Fees and other income totaled NIS 1,297 million in the second quarter of 2014 compared with NIS 1,282 million in the same quarter last year, an increase of 1.2%.

Operating and other expenses totaled NIS 2,251 million in the second quarter of 2014 compared with NIS 2,135 in the same quarter last year.

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 half of 2014 was expressed in a financial value of approximately NIS 29 million.

In recent weeks, during Operation Protective Edge, Bank Hapoalim provided assistance to residents of the south, especially to small and medium-size businesses. The Bank took a number of initiatives, including providing benefits to local customers, and special activities such as hosting a shopping fair to support businesses from the South in which thousands of Israelis participated and bought products.

Developments in Balance Sheet Items:

The consolidated balance sheet as at June 30, 2014 totaled NIS 370.4 billion, compared with NIS 380.2 billion at the end of 2013, a decrease of 2.6%.

Net Credit to the public totaled NIS 252.1 billion, compared with NIS 251.6 billion at the end of 2013, an increase of 0.2% mainly as a result of an increase in retail, small business, and commercial credit offset by a decrease in corporate credit.

Credit to Retail customers totaled NIS 103.5 billion compared with NIS 100.4 billion at the end of 2013, an increase of 3.0%. This includes consumer credit which totaled NIS 33.0 billion compared with NIS 31.4 billion at the end of 2013, an increase of 5.1%. Mortgages totaled NIS 59.2 billion compared with NIS 57.9 billion at the end of 2013, an increase of 2.3%.

Credit to Small Businesses totaled NIS 27.4 billion in the second quarter of 2014 compared with NIS 26.2 billion at the end of 2013, an increase of 4.4%.

Credit to the Commercial segment totaled NIS 31.9 billion in the second quarter of 2014 compared with NIS 30.6 billion at the end of 2013, an increase of 4.1%.

Deposits from the public totaled NIS 268.9 billion compared with NIS 276.5 billion at the end of 2013, a decrease of 2.7%.

Shareholders' Equity totaled NIS 30.5 billion in the second quarter of 2014 compared with NIS 29.1 billion at the end of 2013, an increase of 5.1%.

Conference Call Information

Bank Hapoalim will host a conference call as well as a slide presentation webcast today to review the Second Quarter 2014 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 Second Quarter 2014 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 1:00 p.m. U.S. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel Time on Thursday, August 14th, 2014 through 1:00 p.m. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel Time on Thursday August 21st, 2014 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 260 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
June 30,
2014
March 31
2014
March 31,
2013
Sept. 30,
2013
June 30,
2013
Profit and Profitability
Net financing income* 2,322 2,056 2,073 2,117 2,176
Fees and other income 1,297 1,299 1,394 1,278 1,282
Total income 3,619 3,355 3,467 3,395 3,458
Provision (income) for credit losses (3) (15) (59) 375 301
Operating and other expenses 2,251 2,156 2,562 2,133 2,135
Net profit attributed to shareholders of the Bank 783 753 651 653 655
For the six months
ended
For the year
ended
June 30,
2014
March 31,
2013
March 31,
2013
Net financing income* 4,378 4,233 8,423
Fees and other income 2,596 2,569 5,241
Total income 6,974 6,802 13,664
Provision (income) for credit losses (18) 558 874
Operating and other expenses 4,407 4,270 8,965
Net profit attributed to shareholders of the Bank 1,536 1,276 2,580
June 30,
2014
March 31,
2014
March 31,
2013
Sept. 30,
2013
June 30,
2013
Main Financial Ratios
Total balance sheet 370,390 376,867 380,246 374,216 378,483
Net credit to the public 252,066 250,232 251,600 249,341 247,120
Securities 63,800 65,333 60,912 60,998 61,137
Deposits from the public 268,935 276,014 276,525 269,632 274,601
Bonds and subordinated notes 30,533 31,314 33,980 34,819 35,874
Shareholders' equity 30,542 29,855 29,060 28,391 27,808
Net total problematic credit risk** 13,483 14,205 16,279 13,870 13,264
Of which: net impaired balance sheet debts** 6,038 6,305 6,817 6,624 7,030
For the three months ended
June 30,
2014
March 31,
2014
Dec. 31,
2013
Sept. 30,
2013
June 30,
2013
Main Financial Ratios
Net loan to deposit ratio 93.7% 90.7% 91.0% 92.5% 90.0%
Net loan to deposit ratio including bonds and subordinated notes 84.2% 81.4% 81.0% 81.9% 79.6%
Shareholders' equity to total assets 8.2% 7.9% 7.6% 7.6% 7.3%
Common equity Tier 1 capital according to Basel 3 9.5% 9.4%
Total capital according to Basel 3 15.0% 15.0%
Ratio of core capital to risk-adjusted assets according to Basel 2 9.4% 9.3% 9.2%
Ratio of total capital to risk-adjusted assets according to Basel 2 15.6% 15.7% 15.7%
Financing margin from regular activity(1)(2) 2.31% 2.09% 2.13% 2.20% 2.16%
Cost-income ratio(5) 62.2% 64.3% 61.2% 62.8% 61.7%
Total income to assets(3) 3.9% 3.6% 3.8% 3.6% 3.7%
Total expenses to assets(4) 2.4% 2.3% 2.8% 2.3% 2.3%
Provision for credit losses as a percentage of the average recorded balance of credit to the public(1) (0.00%) (0.02%) (0.09%) 0.59% 0.48%
Net return of profit attributed to shareholders of the Bank on equity(1) 10.8% 10.7% 9.4% 9.6% 9.9%
Basic net earnings per share in NIS attributed to shareholders of the Bank 0.59 0.57 0.49 0.50 0.50
For the six months
ended
For the
year
ended
June 30,
2014
June 30,
2013
Dec. 31,
2013
Financing margin from regular activity(1)(2) 2.19% 2.11% 2.12%
Cost-income ratio(5) 63.2% 62.8% 62.4%
Total income to assets(3) 3.8% 3.7% 3.7%
Total expenses to assets(4) 2.4% 2.3% 2.4%
Provision for credit losses as a percentage of the average recorded balance of credit to the public(1) (0.01%) 0.44% 0.34%
Net return of profit attributed to shareholders of the Bank on equity(1) 10.6% 9.6% 9.3%
Basic net earnings per share in NIS attributed to shareholders of the Bank 1.16 0.97 1.96
* Net financing income includes net interest income and non-interest income (expenses).
** Net of the individual allowance, the allowance according to the extent of arrears, and the collective allowance in respect of problematic credit risk.
(1) Calculated on an annualized basis.
(2) Financing profit from regular activity (see the Board of Directors' report, in the section Profit and Profitability – Development of Financing Profit) is divided by total financial assets after allowance for credit losses, net of non-interest bearing balances in respect of credit cards.
(3) Total income divided by the average balance of total assets.
(4) Total operating and other expenses, divided by the balance of total average assets.
(5) Does not include expenses for efficiency plans.

CONTACT: For further information please contact: Press: Ofra Preuss, Bank's Spokesperson Tel: +972-3-567-3635; Fax: +972-3-567-3500 spokesperson@mailpoalim.co.il Investors: Effie Werber, Head of Investor Relations Tel. +972-3-567-3440; Fax: +972-3-5673470 effie.werber@mailpoalim.co.ilSource:Bank Hapoalim