Net Profit totaled NIS 753 million Return on Equity of 10.7% Basel 3 Tier 1 Capital rose to 9.4% Cash Dividend Payout of NIS 106 million to be paid from First Quarter 2014 Net Profit


Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the first quarter ended  March 31, 2014.

First Quarter 2014 Financial Highlights:  

  • Net profit totaled NIS 753 million compared with a profit of NIS 621 million in the same quarter last year.  
  • Return on equity reached 10.7%, compared with 9.5% in the same quarter last year.  
  • Tier 1 Capital Ratio, in Basel 3 terms, stood at 9.44% at the end of the first quarter 2014, compared with 9.15% at January 1, 2014.  
  • Total Capital Ratio, in Basel 3 terms, as at March 31, 2014 was 14.96% compared with 14.68% on January 1, 2014.  
  • Quarterly Dividend - The Bank's Board of Directors approved the continuation of the quarterly cash dividend distribution, at a rate of approximately 15% of net profit, from its first quarter 2014 earnings in the amount of NIS 106 million.

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

Profit from regular financing activity totaled NIS 1,795 million in the first quarter of 2014, up from a profit of NIS 1,773 million in the same quarter last year.

The financial margin from regular activity stood at 2.1% in the first quarter of 2014, similar to the same quarter last year.

Provision for credit losses in the first quarter of 2014 recorded income of NIS 15 million, compared with an expense of NIS 257 million in the same quarter last year.

Fees and other income totaled NIS 1,299 million in the first quarter of 2014 compared with NIS 1,287 million in the same quarter last year, an increase of 0.9%.

Operating and other expenses totaled NIS 2,156 million in the first quarter of 2014 compared with NIS 2,135 in the same quarter last year.

Dividend declared - The Bank's Board of Directors approved the continuation of the quarterly cash dividend distribution and declared a dividend with respect to the first quarter 2014 profits, of approximately NIS 106 million, which amounts to 8 agorot per share. The record date is May 29, 2014 and the date of payment is June 12, 2014.

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 quarter of 2014 was expressed in a financial value of approximately NIS 18 million.

Developments in Balance Sheet Items:

The consolidated balance sheet as at March 31, 2014 totaled NIS 376.9 billion, compared with NIS 380.2 billion at the end of 2013, a decrease of 0.9%.

Net Credit to the public totaled NIS 250.2 billion, compared with NIS 251.6 billion at the end of 2013, a decrease of 0.5% mainly as a result of a decrease in corporate credit offset by an increase in retail, small business, and commercial credit.

Credit to Retail customers totaled NIS 102.0 billion compared with NIS 100.4 billion at the end of 2013, an increase of 1.5%. This includes consumer credit which totaled  NIS 32.3 billion compared with NIS 31.4 billion at the end of 2013, an increase of 2.6%. Mortgages totaled NIS 58.4 billion compared with NIS 57.9 billion at the end of 2013, an increase of 0.9%.

Credit to Small Businesses totaled NIS 26.7 billion compared with NIS 26.2 billion at the end of 2013, an increase of 1.9%.

Credit to the Commercial segment totaled NIS 31.3 billion compared with NIS 31.1 billion at the end of 2013, an increase of 0.4%.

Deposits from the public totaled NIS 276.0 billion compared with NIS 276.5 billion at the end of 2013, a decrease of 0.2%, mainly a result of a shift in customers' investment preferences.

Shareholders' Equity totaled NIS 29.9 billion as at March 31, 2014, compared with NIS 29.1 billion at the end of 2013, an increase of 2.7%.

Conference Call Information

Bank Hapoalim will host a conference call as well as a slide presentation webcast today to review the First Quarter 2014 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 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 Thursday, May  22, 2014 through 1:00 p.m. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel Time on Thursday May 29, 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 over 260 branches, eight 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, private banking and retail 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)
     
Profit and Profitability   For the three months ended
  March 31, 2014 Dec. 31, 2013 Sept. 30, 2013 June 30, 2013 March 31, 2013
Net financing income* 2,056 2,073 2,117 2,176 2,057
Fees and other income 1,299 1,394 1,278 1,282 1,287
Total income 3,355 3,467 3,395 3,458 3,344
Provision (income) for credit losses (15) (59) 375 301 257
Operating and other expenses 2,156 2,562 2,133 2,135 2,135
Net profit attributed to shareholders of the Bank 753 651 653 655 621
 
  March 31, 2014 Dec. 31, 2013 Sept. 30, 2013 June 30, 2013 March 31, 2013
Balance Sheet – Principal Data          
Total balance sheet 376,867 380,246 374,216 378,483 370,317
Net credit to the public 250,232 251,600 249,341 247,120 247,782
Securities 65,333 60,912 60,998 61,137 59,461
Deposits from the public 276,014 276,525 269,632 274,601 265,297
Bonds and subordinated notes 31,314 33,980 34,819 35,874 36,222
Shareholders' equity 29,855 29,060 28,391 27,808 27,279
Net total problematic credit risk** 14,205 16,279 13,870 13,264 13,561
Of which: net impaired balance sheet debts** 6,305 6,817 6,624 7,030 6,856
           
 
Main Financial Ratios March 31, 2014 Dec. 31, 2013 Sept. 30, 2013 June 30, 2013 March 31, 2013
Net loan to deposit ratio 90.7% 91.0% 92.5% 90.0% 93.4%
Net loan to deposit ratio including bonds and subordinated notes 81.4% 81.0% 81.9% 79.6% 82.2%
Shareholders' equity to total assets 7.9% 7.6% 7.6% 7.3% 7.4%
Common equity Tier 1 capital according to Basel 3 9.4%        
Total capital according to Basel 3 15.0%        
Ratio of core capital to risk-adjusted assets according to Basel 2 --  9.4% 9.3% 9.2% 9.1%
Ratio of total capital to risk-adjusted assets according to Basel 2 --  15.6% 15.7% 15.7% 15.6%
Financing margin from regular activity(1)(2) 2.09% 2.13% 2.20% 2.16% 2.07%
Cost-income ratio(5) 64.3% 61.2% 62.8% 61.7% 63.8%
Total income to assets(3) 3.6% 3.8% 3.6% 3.7% 3.7%
Total expenses to assets(4) 2.3% 2.8% 2.3% 2.3% 2.3%
Provision (income) for credit losses as a percentage of the average recorded balance of credit to the public(1) (0.02%) (0.09%) 0.59% 0.48% 0.41%
Net return of profit attributed to shareholders of the Bank on equity(1) 10.7% 9.4% 9.6% 9.9% 9.5%
Basic net earnings per share in NIS attributed to shareholders of the Bank 0.57 0.49 0.50 0.50 0.47
           
* 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: 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.il
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