Bank Hapoalim Q3 profit tops estimates, dividend on hold
Bank Hapoalim, Israel’s largest lender, reported higher quarterly net profit that beat estimates, but again decided not to pay a quarterly dividend due to an ongoing US tax evasion investigation.
Hapoalim said on Thursday it earned NIS 950 million ($257.5m.) in the third quarter, up from NIS 469m. a year earlier and compared with NIS 854m. forecast in a Reuters poll of analysts.
Excluding one-time items, net profit in the quarter was NIS 980m., compared with NIS 861m. a year earlier.
The bank said it did not make an additional provision this quarter to cover a possible future settlement regarding the investigation of the bank’s business with US clients. It previously had provisioned $365m.
The bank’s board did not declare a quarterly dividend for the second quarter in a row due to the uncertainty of the probe. It said this did not change its policy of paying dividends of up to 40% of quarterly net profit.
“We believe this is for sake of conservatism, despite the bank’s very large excess capital position,” said Barclays analyst Tavy Rosner, who rates the shares “overweight”.
Its shares were up 0.8% to NIS 26.58 in morning trade, outpacing a flat blue chip Tel Aviv-35 index.
Net interest income rose to NIS 2.23 billion in the quarter from NIS 2.09b. a year earlier, while it had a credit loss expense of NIS 118m. compared with income of NIS 8m.
Operating expenses fell 11% and included one-time expenses related to legal fees and the discontinuation of Swiss activities.
Its core Tier 1 capital ratio to risk-weighted assets, a key measure of financial strength, rose to 11.32% from 11.26% at the end of 2017.
Top rival Leumi said on Tuesday it earned NIS 936m. in the quarter, up from NIS 820m. a year earlier.
In September, US-Israeli billionaire Shari Arison said she would sell shares in Hapoalim to the public after failing to find a strategic partner to share control of the bank. (Reuters)