Bank Hapoalim, headed by Yadin Antebi, has opened the reporting season for Israel’s banks with financials showing 14% growth in third quarter net profit to NIS 1.9 billion. The rise in comparison with the third quarter of 2023 stems mainly from the high interest rate environment, which led to growth in interest income, alongside a reduction in the credit loss expense. In the third quarter of 2023, the banks were directed by the Bank of Israel to make general provisions against credit losses.
The third quarter net profit is, however, 14% lower than the profit in the second quarter of this year, mainly because of a rise in credit losses in comparison with that quarter.
Bank Hapoalim’s return on equity in the third quarter of this year was an annualized 13.6%, which is low in comparison with the returns recorded by the bank’s competitors in recent quarters, but still historically high.
Third quarter interest income rose 13% to NIS 9.6 billion. The reason for the sharp rise in interest income is a combination of high interest rates and growth in the credit portfolio. Net interest income was NIS 4.58 billion, 14% more than in the corresponding quarter.
The bank’s credit loss expense in the quarter totaled NIS 406 million, 39% less than in the corresponding quarter, but, as mentioned, in the corresponding quarter the bank made a general provision in accordance with instructions from the Bank of Israel to all the banks.
Bank Hapoalim’s board of directors has declared a dividend of 40% of the third quarter net profit, of which NIS 512 million will be in cash and the remainder in the form of a share buyback to the tune of NIS 250 million, representing the second part of the share buyback program announced in the previous quarter.
Published by Globes, Israel business news – en.globes.co.il – on November 18, 2024.
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