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Bank Hapoalim Announces Third Quarter 2014 Financial Results

Net Profit totaled NIS 740 million

Return on Equity of 9.9%

Tier 1 Capital of 9.4%

Cash Dividend Payout of NIS 117 million to be paid from Third Quarter 2014 Net Profit

TEL AVIV, Israel, Nov. 24, 2014 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the third quarter ended September 30, 2014.

Third Quarter 2014 Financial Highlights:

  • Net profit totaled NIS 740 million compared with a profit of NIS 653 million in the same quarter last year.
  • Return on equity reached 9.9%, compared with 9.6% in the same quarter last year.
  • Tier 1 Capital Ratio, in Basel 3 terms, stood at 9.39% at the end of the third quarter 2014, compared with 9.15% at January 1, 2014.
  • Total Capital Ratio, in Basel 3 terms, as at September 30, 2014 totaled 14.7%, similar to that on January 1, 2014.
  • Quarterly Dividend - The Bank's Board of Directors approved the quarterly cash dividend distribution, at a rate of approximately 15% of net profit, from its third quarter 2014 earnings in the amount of NIS 117 million.

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

Profit from regular financing activity totaled NIS 1,915 million in the third quarter of 2014, compared with NIS 1,922 million in the same quarter last year.

The financial margin from regular activity totaled 2.21% in the third quarter of 2014, compared to 2.20% in the same quarter last year.

Provision for credit losses in the third quarter of 2014 totaled NIS 80 million, compared to NIS 375 million in the same quarter last year.

Fees and other income totaled NIS 1,304 million in the third quarter of 2014 compared with NIS 1,278 million in the same quarter last year.

Operating and other expenses totaled NIS 2,209 million in the third quarter of 2014 compared with NIS 2,133 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 from the beginning of 2014 was expressed in a financial value of approximately NIS 38 million.

Developments in Balance Sheet Items:

The consolidated balance sheet as at September 30, 2014 totaled NIS 394.2 billion, compared with NIS 380.2 billion at the end of 2013, an increase of 3.7%.

Net Credit to the public totaled NIS 257.8 billion, compared with NIS 251.6 billion at the end of 2013. The 2.5% increase resulted mainly from an increase in retail, small business, and commercial credit partially offset by a decrease in corporate credit.

Credit to Retail customers totaled NIS 33.7 billion compared with NIS 31.4 billion at the end of 2013, an increase of 7.2%.

Mortgages totaled NIS 60.5 billion compared with NIS 57.9 billion at the end of 2013, an increase of 4.5%.

Credit to Small Businesses totaled NIS 28.3 billion in the end of the third quarter of 2014 compared with NIS 26.2 billion at the end of 2013, an increase of 7.8%.

Credit to the Commercial segment totaled NIS 33.1 billion in the end of the third quarter of 2014 compared with NIS 30.7 billion at the end of 2013, an increase of 7.8%.

Deposits from the public totaled NIS 281.8 billion compared with NIS 276.5 billion at the end of 2013, an increase of 1.9%.

Shareholders' Equity totaled NIS 31.3 billion in the end of the third quarter of 2014 compared with NIS 29.1 billion at the end of 2013, an increase of 7.8%.

Conference Call Information

Bank Hapoalim will host a conference call as well as a slide presentation webcast today to review the Third 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 Third 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 Monday, November 24th, 2014 through 1:00 p.m. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel Time on Monday December 1st, 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, and private 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
Sept. 30, 2014 June 30, 2014 March 31, 2014 Dec. 31, 2013 Sept. 30, 2013
Profit and Profitability
Net financing income* 2,160 2,322 2,056 2,073 2,117
Fees and other income 1,304 1,297 1,299 1,394 1,278
Total income 3,464 3,619 3,355 3,467 3,395
Provision (income) for credit losses 80 (3) (15) (59) 375
Operating and other expenses 2,209 2,251 2,156 2,562 2,133
Net profit attributed to shareholders of the Bank 740 783 753 651 653
For the nine months ended For the year ended
Sept. 30, 2014 Sept. 30, 2013 Dec. 31, 2013
Net financing income* 6,538 6,350 8,423
Fees and other income 3,900 3,847 5,241
Total income 10,438 10,197 13,664
Provision (income) for credit losses 62 933 874
Operating and other expenses 6,616 6,403 8,965
Net profit attributed to shareholders of the Bank 2,276 1,929 2,580
Sept. 30, 2014 June 30, 2014 March 31, 2014 Dec. 31, 2013 Sept. 30, 2013
Main Financial Ratios
Total balance sheet 394,229 370,390 376,867 380,246 374,216
Net credit to the public 257,826 252,066 250,232 251,600 249,341
Securities 57,190 63,800 65,333 60,912 60,998
Deposits from the public 281,760 268,935 276,014 276,525 269,632
Bonds and subordinated notes 34,073 30,533 31,314 33,980 34,819
Shareholders' equity 31,340 30,542 29,855 29,060 28,391
Net total problematic credit risk** 13,361 13,483 14,205 16,279 13,870
Of which: net impaired balance sheet debts** 5,719 6,038 6,305 6,817 6,624
(NIS millions)
For the three months ended
Sept. 30, 2014 June 30, 2014 March 31, 2014 Dec. 31, 2013 Sept. 30, 2013
Main Financial Ratios
Net loan to deposit ratio 91.5% 93.7% 90.7% 91.0% 92.5%
Net loan to deposit ratio including bonds and subordinated notes 81.6% 84.2% 81.4% 81.0% 81.9%
Shareholders' equity to total assets 7.9% 8.2% 7.9% 7.6% 7.6%
Common equity Tier 1 capital according to Basel 3 9.4% 9.5% 9.4%
Total capital according to Basel 3 14.7% 15.0% 15.0%
Ratio of core capital to risk-adjusted assets according to Basel 2 9.4% 9.3%
Ratio of total capital to risk-adjusted assets according to Basel 2 15.6% 15.7%
Financing margin from regular activity(1)(2) 2.21% 2.31% 2.09% 2.13% 2.20%
Cost-income ratio(5) 63.8% 62.2% 64.3% 61.2% 62.8%
Total income to assets(3) 3.7% 3.9% 3.6% 3.8% 3.6%
Total expenses to assets(4) 2.4% 2.4% 2.3% 2.8% 2.3%
Provision for credit losses as a percentage of the average recorded balance of credit to the public(1) 0.12% (0.00%) (0.02%) (0.09%) 0.59%
Net return of profit attributed to shareholders of the Bank on equity(1) 9.9% 10.8% 10.7% 9.4% 9.6%
Basic net earnings per share in NIS attributed to shareholders of the Bank 0.56 0.59 0.57 0.49 0.50
For the nine months ended For the year ended
Sept. 30, 2014 Sept. 30, 2013 Dec. 31, 2013
Financing margin from regular activity(1)(2) 2.19% 2.13% 2.12%
Cost-income ratio(5) 63.4% 62.8% 62.4%
Total income to assets(3) 3.7% 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) 0.03% 0.49% 0.34%
Net return of profit attributed to shareholders of the Bank on equity(1) 10.2% 9.5% 9.3%
Basic net earnings per share in NIS attributed to shareholders of the Bank 1.72 1.46 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: 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