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Bank Hapoalim Announces First Quarter 2013 Financial Results

Return on Equity of 9.5%

Net Profit totaled NIS 621 million

Core Tier 1 Capital rose to 9.1%

TEL AVIV, Israel, May 30, 2013 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the first quarter ended March 31, 2013.

First Quarter 2013 Financial Highlights:

  • Return on equity reached 9.5%, on an annualized basis, compared with 10.3% in the fourth quarter of 2012.
  • Net profit totaled NIS 621 million compared with a profit of NIS 652 million in the fourth quarter of 2012.
  • Profit from regular financing activity totaled NIS 1,773 million, compared with NIS 1,755 million in the fourth quarter of 2012.
  • Operating and other expenses totaled NIS 2,135 million compared with NIS 2,354 million in the fourth quarter of 2012.
  • Shareholders' Equity totaled NIS 27,279 million as at March 31, 2013, compared with NIS 26,755 million at the end of 2012.
  • Core Tier 1 Capital ratio continued its trend of improvement and rose to 9.1% compared with 8.9% at the end of 2012.

Main developments in the financial statements for the first quarter of 2013:

Profit from regular financing activity totaled NIS 1,773 million in the first quarter of 2013, compared with a profit of NIS 1,755 million in the sequential fourth quarter of 2012, an increase of 1.0%.

The financial margin from regular activity increased to 2.07% in the first quarter of 2013, compared with 2.06% in the sequential fourth quarter of 2012.

Provision for credit losses in the first quarter of 2013 totaled NIS 257 million, including an NIS 84 million supplementary collective provision with respect to housing loans, compared with NIS 54 million in the sequential fourth quarter of 2012. The rate of provision as a percentage of credit to the public reached 0.41% at the end of the first quarter compared with 0.09% in the sequential fourth quarter of 2012.

Fees and other income totaled NIS 1,287 million in the first quarter of 2013 compared with NIS 1,314 million in the sequential fourth quarter of 2012, a decrease of 2.1%, mainly as a result of a decrease in fees as a consequence of the implementation of the recommendations of Bank of Israel's Committee on Competitiveness.

Operating and other expenses totaled NIS 2,135 million in the first quarter of 2013 compared with NIS 2,354 million in the sequential fourth quarter of 2012, a decrease of 9.3%, as a result of a decrease in all expense items mainly due to the implementation of efficiency measures in the Bank.

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 three months of 2013 was expressed in a financial value of approximately NIS 16 million.

Developments in Balance Sheet Items:

The consolidated balance sheet as at March 31, 2013 totaled NIS 370.3 billion, compared with NIS 376.4 billion at the end of 2012, a decrease of 1.6%.

Net Credit to the public as at March 31, 2013 totaled NIS 247.8 billion, compared with NIS 249.2 billion at the end of 2012, a decrease of 0.6% mainly as a result of a decrease in corporate credit, offset by an increase in retail and commercial credit.

Deposits from the public totaled NIS 265.3 billion compared with NIS 271.4 billion at the end of 2012, a decrease of 2.3%, mainly a result of exchange rate differentials and a shift in customers' risk appetite.

Shareholders' Equity totaled NIS 27,279 million as at March 31, 2013, compared with NIS 26,755 million at the end of 2012, an increase of 2.0%, mainly stemming from retained earnings.

Core Tier 1 Capital Ratio stood at 9.1% at the end of the first quarter of 2013, compared to 8.9% at the end of 2012.

Total Capital Adequacy Ratio stood at 15.6% at the end of the first quarter of 2013 compared to 15.7% at the end of 2012.

Conference Call Information

Bank Hapoalim will host a conference call as well as a slide presentation webcast today to review the first quarter 2013 financial results at 10:00 a.m. U.S. Eastern Time / 3:00 p.m. UK Time / 5:00 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 first quarter 2013 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, May 30th, through 1:00 p.m. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel Time on June 6, 2013, by telephone at (972) 3-9255900 (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 over 280 branches, eight regional business centers, a 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, and Turkey. 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.

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 three months ended
March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012
Net financing income* 2,057 2,111 2,115 2,041 2,148
Fees and other income 1,287 1,314 1,335 1,266 1,307
Total income 3,344 3,425 3,450 3,307 3,455
Provision for credit losses 257 54 286 344 303
Operating and other expenses 2,135 2,354 2,249 2,118 2,104
Net profit attributed to shareholders of the Bank 621 652 625 607 659
Balance Sheet – Principal Data
March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012
Total balance sheet 370,317 376,388 367,365 362,105 350,350
Net credit to the public 247,782 249,182 249,904 248,614 244,804
Securities 59,461 52,070 53,076 40,728 36,903
Deposits from the public 265,297 271,411 264,490 259,668 251,576
Bonds and subordinated notes 36,222 35,677 36,051 35,679 34,422
Shareholders' equity 27,279 26,755 25,759 24,907 24,440
Net total problematic credit risk** 13,561 13,284 14,187 13,398 13,993
Of which: net impaired balance sheet debts** 6,856 6,701 6,493 6,685 6,356
Main Financial Ratios
March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012
Net loan to deposit ratio 93.4% 91.8% 94.5% 95.7% 97.3%
Financing margin from regular activity 82.2% 81.1% 83.2% 84.2% 85.6%
Shareholders' equity to total assets 7.4% 7.1% 7.0% 6.9% 7.0%
Core Tier 1 capital to risk-adjusted assets 9.1% 8.9% 8.5% 8.3% 8.2%
Total capital to risk-adjusted assets 15.6% 15.7% 15.1% 14.8% 14.7%
Financing margin from regular activity (1) (2) 2.07% 2.06% 2.37% 2.47% 2.36%
Cost-income ratio 63.8% 68.7% 65.2% 64.0% 60.9%
Total assets to income (3) 3.7% 3.8% 3.8% 3.8% 4.0%
Total assets to expenses (4) 2.3% 2.6% 2.5% 2.4% 2.4%
Provision for credit losses as a percentage of the average recorded balance of credit to the public (1) 0.41% 0.09% 0.45% 0.55% 0.49%
Net return of profit attributed to shareholders of the Bank on equity (1) 9.5% 10.3% 10.2% 10.2% 11.3%
Basic net earnings per share in NIS attributed to shareholders of the Bank 0.47 0.49 0.47 0.46 0.50
* 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 for 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 financing and operating income, divided by the balance of total average assets.
(4) Total operating and other expenses, divided by the balance of total average assets.

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