TEL AVIV, Israel, Aug. 16, 2021 /PRNewswire/ -- Bank Hapoalim (TASE: POLI) (ADR: BKHYY) today announced its financial results for the second quarter ended June 30, 2021.
Key highlights
- Net profit in the second quarter of 2021 totaled NIS 1,419 million, compared with NIS 133 million in same quarter last year. The results were supported by strong underlying business performance, an increase in CPI (1.3% in the known CPI) and an improvement in economic indicators, which led to a reduction of the collective provision for credit losses, coupled with a recovery in the individual provision. Net profit in the first half of 2021 totaled NIS 2,773 million.
- Return on equity (ROE) for the quarter stood at 14.5%, compared with 1.4% in the same quarter last year. ROE for the first half of 2021 stood at 14.1%, vs. 1.7% in the corresponding period.
- Shareholders' equity grew by 3.6% in the quarter, and by 11.3% versus last year, to NIS 42.3 billion.
- The Common Equity Tier 1 (CET1) capital ratio as at June 30, 2021, stood at 11.61%, well above both current regulatory (9.21%) and internal (9.5%) capital targets. Further to the announcement of the Bank of Israel, the Board of Directors of the Bank announced the distribution of dividends in the amount of NIS 616.8 million, constituting 30% of 2020 net profit. The date of payment is August 18, 2021.
Balance sheet
- Net credit to the public totaled NIS 323.8 billion, compared with NIS 306.1 billion at the end of March 2021, an increase of 5.8%, thereby completing 10.2% growth year-on-year.
- The growth was recorded in all segments of operations, in line with the Bank's strategy, and led by the corporate, commercial and mortgages segments. Corporate credit increased by 10.4% in the second quarter and 14.4% compared to the corresponding quarter last year. Credit to the commercial segment increased by 8.4% in the second quarter and by 16.1% in the last twelve months. The growth in these segments was recorded in various economic sectors, particularly in real estate. Amid high demand in the housing market, the bank granted housing loans in the amount of approximately NIS 4.3 billion in the second quarter, reflecting growth of 4.3% in the quarter and 11.8% over the last year. The consumer and small business segments are showing recovery in the demand for credit. Accordingly, the Bank saw 0.7% and 2.1% growth in the quarter in these segments, respectively.
- Retail deposits totaled NIS 284.1 billion in the second quarter of 2021, an increase of 7.8% from last year. Total deposits from the public increased by 20.5% versus the corresponding period.
- Allowance for credit losses totaled NIS 5.9 billion as at June 30, 2021. Though it declined in the first half, due to improved economic indicators, the allowance remained high, reflecting an NPL coverage ratio of 210%, as NPL balances declined by 13.0% during the first half of 2021.
Income statement
- Income from regular financing activity totaled NIS 2, 540 million in the second quarter of 2021, an increase of 8.6% compared to the preceding quarter, driven by credit portfolio growth and an increase in the CPI.
- Fee income totaled NIS 802 million in the second quarter, compared with NIS 817 million in the previous quarter, a decline of 1.8%. Capital-market fees declined this quarter, as the preceding quarter was exceptionally high. By contrast, account-management fees increased by approximately 3% quarter-on-quarter; credit-card fees grew by 27%, with the emergence from the lockdown during the first quarter; and fees from financing transactions grew by 6%, due to an increase in the volume of activity.
- Operating and other expenses totaled NIS 1,980 million in the second quarter, compared with NIS 1,919 million in the preceding quarter. The increase was mainly influenced by an increase in salary expenses, due to a provision for performance-based bonuses, in line with the improvement in profitability. The cost-income ratio for the second quarter of 2021 stood at 56.0%, compared with 53.6% in the preceding quarter.
- Net provision for credit losses recorded a net income of NIS 647 million in the quarter, or -0.81% of the average total credit to the public (annualized), compared with a net income fromprovision for credit losses of NIS 508 million in the first quarter of 2021. The income from credit losses in both quarters was supported by an improvement in economic indicators, which led to a reduction of the collective provision for credit losses, along with an individual allowance recovery.
Recent developments
- Head-office building acquisition: In June 2021, the Board of Directors of the bank approved the relocation of the head offices of the bank to a new, advanced central facility in Tel Aviv. The new headquarters building will have innovative and advanced infrastructures and work environments, and will be compliant with green building standards, with an emphasis on saving energy and water. The move, planned for late 2025, will generate significant efficiencies and savings on logistical and operational expenses for the bank.
- ESG ratings leader: Bank Hapoalim, celebrating its hundredth year, recently scored 100 on the Maala corporate responsibility ESG scale. This score reflects years of far-reaching action by the bank dedicated to society, the environment, and economic growth in Israel. Bank Hapoalim is at the forefront of the Maala corporate responsibility ratings, and has outperformed all organizations in Israel on this index for four consecutive years.
- Business strategy of the bank: The performance of the bank in the quarter reflects management's focus on rigorous execution of the Bank's strategy, adopted in late 2020, the main pillars of which are:
- Growth in banking activity – The bank will work to grow the volume of its activity with retail, commercial, and corporate banking customers, while continually improving its value proposition for customers.
- Development of new banking – The bank will promote the development of new distribution channels for banking services and products, with an emphasis on new digital distribution channels based on advanced data-analysis capabilities and an outstanding user experience.
- Building a growth-supporting organizational infrastructure – The bank will work to drive processes encouraging a customer-centric, growth-supporting organizational culture, enabling it to improve its delivery and time to market.
- COVID-19: The bank remains committed to supporting its employees, customers, and the community through the COVID-19 crisis. Among its many initiatives:
- Deferral of loan payments: The bank has continued to expand measures for its customers who are affected by COVID-19. Among other efforts, the bank is allowing customers to defer loan and mortgage payments, in order to provide cash-flow relief. As at June 30, 2021, payment deferrals have been applied to loan balances of NIS 37.6 billion, in aggregate, and the balance of loans in payment deferral has decreased substantially, falling to approximately NIS 3.5 billion (1.1% of total credit to the public).
- Participation in government guarantee program: The bank continues to offer loans to businesses under the program. As at the end of June 2021, the bank has provided loans to its customers in the amount of approximately NIS 5.7 billion, approximately NIS 4.5 billion (79%) of which have been granted to small businesses and microbusinesses, and the remainder to mid-sized and large businesses.
Conference-call information
Bank Hapoalim will host a conference call today to discuss the results. The call will take place at 5:00 p.m.Israel time / 3:00 p.m. UK time / 10:00 a.m. US Eastern time. To access the conference call, please dial: +1–888-281-1167 toll-free from the United States, +0-800-917-5108 toll-free from the United Kingdom, or +972–3-918-0610 internationally. No password is required. The call will be accompanied by a slide presentation, which, together with the financial statements, will be available on the Bank Hapoalim website at www.bankhapoalim.com, under Investor Relations > Financial Information. A recording of the conference call will be available on the bank's website at the above address one business day following the completion of the call.
Please note: The conference call does not replace the need to peruse the immediate reports and the financial statements of the bank, including all of the forward-looking information included therein, in accordance with Section 32A of the Israeli Securities Law, 1968.
About Bank Hapoalim
Bank Hapoalim is Israel's leading financial group. In Israel, Bank Hapoalim operates 181 retail branches, regional business centers and specialized industry relationship managers for major corporate customers. The Bank Hapoalim Group includes holdings in financial companies engaged in investment banking, trust services and portfolio management. Internationally, commercial banking services are provided in North America by the New York branch. Bank Hapoalim is listed on the Tel Aviv Stock Exchange (TASE: POLI) and holds a Level-1 ADR program. For more information about Bank Hapoalim, please visit us online at www.bankhapoalim.com
Please note: This press release was prepared for convenience only. In case of any discrepancy, the bank's reported financial statements in Hebrew will prevail.
Contact:
Tamar Koblenz
Head of Investor Relations
T: +972 3 5673440
E: Tamar.koblenz@poalim.co.il
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Table 1-1: Condensed financial information and principal performance indicators over time
|
|
|
|
|
For the three months ended June 30
|
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For the six months
ended June 30
|
|
For the year ended December 31
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2020
|
|
Main performance indicators
|
|
|
|
|
|
|
|
|
|
|
|
|
Return of net profit on equity attributed
to shareholders of the Bank(1)
|
|
14.5%
|
|
1.4%
|
|
14.1%
|
|
1.7%
|
|
5.3%
|
|
Return of net profit on equity attributed to shareholders of the Bank excluding extraordinary items(1)(2)
|
|
14.5%
|
|
1.7%
|
|
14.1%
|
|
2.5%
|
|
5.7%
|
|
Return of net profit from continued operations on equity attributed to shareholders of the Bank(1)
|
|
14.5%
|
|
1.4%
|
|
14.1%
|
|
2.3%
|
|
5.6%
|
|
Return of net profit from continued operations on equity attributed to shareholders of the Bank excluding extraordinary items(1)(3)
|
|
14.5%
|
|
1.7%
|
|
14.1%
|
|
2.5%
|
|
|
5.7%
|
|
Return on average assets(1)
|
|
1.0%
|
|
0.1%
|
|
1.0%
|
|
0.1%
|
|
0.4%
|
|
Ratio of income(4)to average assets(1)
|
|
2.49%
|
|
2.54%
|
|
2.56%
|
|
2.73%
|
|
2.65%
|
|
Ratio of fees to average assets(1)
|
|
0.56%
|
|
0.6%
|
|
0.58%
|
|
0.67%
|
|
0.63%
|
|
Efficiency ratio – cost-income ratio from continued operations
|
|
56.0%
|
|
57.9%
|
|
54.8%
|
|
57.2%
|
|
56.9%
|
|
Efficiency ratio – cost-income ratio excluding extraordinary items from continued operations(3)
|
|
56.0%
|
|
57.4%
|
|
54.8%
|
|
56.8%
|
|
56.7%
|
|
Financing margin from regular activity(1)(5)
|
|
1.87%
|
|
1.96%
|
|
1.83%
|
|
2.11%
|
|
1.98%
|
|
Liquidity coverage ratio(6)
|
|
140%
|
|
131%
|
|
140%
|
|
131%
|
|
140%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30
|
|
December 31
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
2020
|
|
Ratio of common equity Tier 1 capital to risk components(7)
|
|
|
|
|
11.61%
|
|
11.23%
|
|
11.52%
|
|
Ratio of total capital to risk components(7)
|
|
|
|
|
14.19%
|
|
14.23%
|
|
14.60%
|
|
Leverage ratio(7)
|
|
|
|
|
6.50%
|
|
6.97%
|
|
6.78%
|
|
(1) Calculated on an annualized basis.
|
|
(2) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group's business with American customers and FIFA, the effect of the closure of the private-banking activity overseas, loss from the separation from Isracard, and loss from impairment in respect of the Bank's investment in Bank Pozitif.
|
|
(3) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group's business with American customers and FIFA, the effect of the closure of the private-banking activity overseas, and loss from impairment in respect of the Bank's investment in Bank Pozitif.
|
|
(4) Total income – net interest income and non-interest income.
|
|
|
(5) Financing profit from regular activity (see the Report of the Board of Directors and Board of Management, in the section "Material developments in income, expenses, and comprehensive income") divided by total financial assets after allowance for credit losses, net of non-interest bearing balances in respect of credit cards.
|
|
(6) For additional information, see the section "Liquidity and refinancing risk," in the Report of the Board of Directors and Board of Management.
|
|
(7) For additional information, see the section "Capital, capital adequacy, and leverage," in the Report of the Board of Directors and Board of Management.
|
|
Condensed financial information and principal performance indicators over time (continued)
|
|
|
|
|
For the three months ended
June 30
|
|
For the six months
ended June 30
|
|
For the year
ended
December 31
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2020
|
|
|
Main credit quality indicators
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses as a percentage of credit
to the public
|
|
1.57%
|
|
2.00%
|
|
1.57%
|
|
2.00%
|
|
2.00%
|
|
|
Impaired debts and debts in arrears of 90 days or
more as a percentage of credit to the public
|
|
1.33%
|
|
1.70%
|
|
1.33%
|
|
1.70%
|
|
1.52%
|
|
|
Net charge-offs as a percentage of average credit
to the public(1)
|
|
(0.12%)
|
|
0.32%
|
|
(0.05%)
|
|
0.29%
|
|
0.09%
|
|
|
Provision (income) for credit losses as a percentage
of average credit to the public(1)
|
|
(0.81%)
|
|
1.49%
|
|
(0.73%)
|
|
1.30%
|
|
0.64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Main profit and loss data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NIS millions
|
|
Net profit attributed to shareholders of the Bank
|
|
1,419
|
|
133
|
|
2,773
|
|
325
|
|
2,056
|
|
|
Net profit attributed to shareholders of the Bank
excluding extraordinary items(2)
|
|
1,419
|
|
161
|
|
2,773
|
|
474
|
|
2,205
|
|
|
Net profit from continued operations attributed to
shareholders of the Bank
|
|
1,419
|
|
133
|
|
2,773
|
|
434
|
|
2,165
|
|
|
Net profit from continued operations
attributed to shareholders of the Bank
excluding extraordinary items(3)
|
|
1,419
|
|
161
|
|
2,773
|
|
474
|
|
2,205
|
|
|
Net interest income
|
|
2,508
|
|
2,166
|
|
4,741
|
|
4,358
|
|
8,797
|
|
|
Provision (income) for credit losses
|
|
(647)
|
|
1,128
|
|
(1,155)
|
|
1,937
|
|
1,943
|
|
|
Net financing profit*
|
|
2,709
|
|
2,359
|
|
5,391
|
|
4,857
|
|
9,885
|
|
|
Non-interest income
|
|
1,025
|
|
988
|
|
2,373
|
|
2,179
|
|
4,379
|
|
|
Of which: fees
|
|
802
|
|
746
|
|
1,619
|
|
1,609
|
|
3,155
|
|
|
Operating and other expenses
|
|
1,980
|
|
1,826
|
|
3,899
|
|
3,742
|
|
7,501
|
|
|
Of which: salaries and related expenses
|
|
1,165
|
|
963
|
|
2,261
|
|
1,925
|
|
3,836
|
|
|
Total income
|
|
3,533
|
|
3,154
|
|
7,114
|
|
6,537
|
|
13,176
|
|
|
Additional data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit per share attributed to
shareholders of the Bank (in NIS)
|
|
1.06
|
|
0.10
|
|
2.08
|
|
0.24
|
|
1.62
|
|
|
Total dividend per share (in agorot)(4)
|
|
|
-
|
|
-
|
|
-
|
|
53.94(5)
|
|
53.94(5)
|
|
|
|
* Net financing profit includes net interest income and non-interest financing income (expenses).
|
|
(1) Calculated on an annualized basis.
|
|
(2) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group's business with American customers and FIFA, the effect of the closure of the private-banking activity overseas, loss from the separation from Isracard, and loss from impairment in respect of the Bank's investment in Bank Pozitif.
|
|
(3) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group's business with American customers and FIFA, the effect of the closure of the private-banking activity overseas, and loss from impairment in respect of the Bank's investment in Bank Pozitif.
|
|
(4) According to the date of declaration (for details regarding a dividend declared after the balance sheet date, see the
section "Capital, capital adequacy, and leverage").
|
|
(5) Paid as a dividend in kind, in shares; calculated based on the Isracard share price on March 8, 2020 (NIS 10.91).
|
|
Condensed financial information and principal performance indicators over time (continued)
|
|
|
|
June 30
|
|
December 31
|
|
|
2021
|
|
2020
|
|
2020
|
|
|
|
NIS millions
|
|
Main balance sheet data
|
|
|
|
|
|
|
|
|
Total assets
|
|
586,344
|
|
499,280
|
|
539,602
|
|
|
Of which: Cash and deposits with banks
|
|
170,439
|
|
113,033
|
|
138,711
|
|
|
Securities
|
|
69,910
|
|
66,513
|
|
71,885
|
|
|
Net credit to the public
|
|
323,757
|
|
293,700
|
|
301,828
|
|
|
Net problematic credit risk
|
|
8,448
|
|
8,513
|
|
9,754
|
|
|
Net impaired balance sheet debts
|
|
2,333
|
|
2,691
|
|
2,517
|
|
|
Credit to the public not accruing interest income (NPL)
|
|
2,792
|
|
3,570
|
|
3,208
|
|
|
Total liabilities
|
|
544,009
|
|
461,226
|
|
499,703
|
|
|
Of which: Deposits from the public
|
|
483,090
|
|
400,816
|
|
435,217
|
|
|
Deposits from banks
|
|
10,110
|
|
3,418
|
|
6,591
|
|
|
Bonds and subordinated notes
|
|
20,944
|
|
25,196
|
|
23,490
|
|
|
Shareholders' equity
|
|
42,314
|
|
38,024
|
|
39,873
|
|
|
|
|
|
|
|
|
|
|
Additional data
|
|
|
|
|
|
|
|
|
Share price at end of period (in NIS)
|
|
26.2
|
|
20.6
|
|
22.0
|
|
View original content:https://www.prnewswire.com/news-releases/bank-hapoalim-announces-second-quarter-2021-results-301355660.html
SOURCE Bank Hapoalim
