Bank Hapoalim profits surge, dividend payouts resume

Bank Hapoalim, headed by Dov Kotler, posted a net profit of NIS 3 billion in the first half of this year, 8% more than in the first half of 2021. The net profit for the second quarter was NIS 1.34b., 5% below the profit in the corresponding quarter of 2021.

The decline arose from NIS 647 million in reversals of credit-loss provisions last year as debt recovery improved, the bank reported Tuesday in its second-quarter financials. In the second quarter of this year, credit-loss provisions rose NIS 91m., it said.

The bank’s return on equity in the second quarter of this year was 12.3%, compared with 13.8% in the corresponding quarter last year.

The big news for Bank Hapoalim shareholders, however, was that the bank is once again distributing a dividend after two quarters in which it refrained from doing so in an effort to be able to grow its credit portfolio. Credit growth had slowed because the bank had reached the ceiling allowed by the Bank of Israel.

Bank Hapoalim will distribute a dividend of NIS 403m., 30% of its second-quarter profit. The dividend will be paid on September 7. Bank Hapoalim’s regular dividend policy is to distribute 40% of its profits. Nevertheless, the current distribution will be welcomed by its shareholders.

The nonpayment of dividends for two quarters has proved worthwhile for the bank, as total net credit to the public was NIS 372b. at the end of the second quarter, representing 5.5% growth since the beginning of the year.

As demand for home loans remained strong, Bank Hapoalim’s mortgage-loan portfolio grew by NIS 3.2b., or 3.2%, in the second quarter to NIS 123b. Since the beginning of the year, the portfolio has grown 7.4%.

The Bank of Israel raised its interest rate from 0.1% to 0.75% in the second quarter and to 1.25% in July. Bank Hapoalim’s interest income totaled NIS 3.2b. in the second quarter, up 28% from NIS 2.5b. in the second quarter of 2021.

The rise in the rate of inflation also affected the bank’s results. Changes in the consumer price index added NIS 516m. to its income in the second quarter of 2022, compared with NIS 190m. in the corresponding quarter last year. (Globes/TNS)