Net Profit Increased 95.5%
Year-Over-Year to NIS 903 Million Return on Equity Improves to
16.8%
Bank Hapoalim (TASE:POLI) (Pink Sheets:BKHYY), Israel's leading
financial group, today announced financial results for the first
quarter ended March 31, 2011.
First Quarter 2011 Financial Highlights:
- Net profit increased by 95.5% to NIS 903
million compared with a profit of NIS 462 million in the same
quarter last year.
- Return on equity climbed to 16.8%, on an
annualized basis, compared with 9.2% in the same quarter last year.
- Profit from financing activity before expenses for
credit losses rose 28.5% to NIS 2,252 million compared
with a profit of NIS 1,752 million in the same quarter last year.
- Capital adequacy ratio at the end of the first
quarter of 2011 totaled 14.1% similar to the end of 2010.
Main developments in the financial statements for the
first quarter of 2011:
Alongside the continuous implementation of the Bank's multi-year
strategic plan, the Bank continued to deliver an ongoing steady
trend of improvement in financial performance. These results
reflect the continuous business momentum in the Bank's activity
supported by the impressive 4.7% annualized growth of the Israeli
economy during the first quarter, the improved condition of
corporate customers as well as the trend of increasing interest
rates. The Bank continues to act resolutely to meet its business
objectives in line with its strategic plan while fortifying its
leadership position within the banking sector in Israel.
Profit from financing activity before expenses for
credit losses totaled NIS 2,252 million in the first
quarter of 2011, compared with a profit of NIS 1,752 million in the
same quarter last year. The reported financing profit increased
mainly from the positive adjustment to fair value of derivative
instruments compared with a negative adjustment in the same quarter
last year, as well as a result of the increase in profit from
regular financing activity.
Profit from regular financing activity (profit
from financing activity excluding exceptional and other irregular
items) totaled NIS 1,983 million in the first quarter of 2011,
compared with a profit of NIS 1,827 million in the same quarter
last year. The increase resulted mainly from an increase in the
asset base and an improvement in the financial margin which stood
at 2.62%.
Expenses for credit losses in the first quarter
of 2011 totaled NIS 14 million. This small amount results from
significant recoveries of debts written off in the past, as a
result of an improvement in borrowers' repayment capability during
the quarter. This decrease is not the result of the implementation
of new directives for the disclosure and measurement of impaired
debts which was adopted this quarter.
Operating and other income totaled NIS 1,275
million in the first quarter of 2011 compared with NIS 1,217
million in the same quarter last year. The increase resulted mainly
from an increase in income from credit handling and credit card
fees.
Operating and other expenses totaled NIS 2,107
million in the first quarter of 2011 compared with NIS 1,928
million in the same quarter last year. The increase was mainly due
to the provision for employee compensation in light of the
improvement in the Bank's profits.
Developments in Balance Sheet Items
The consolidated balance sheet as of March 31,
2011 totaled NIS 319.5 billion, compared with NIS 320.9 billion at
the end of 2010.
Net Credit to the public as of March 31, 2011
totaled NIS 229.8 billion, compared with NIS 225.3 billion at the
end of 2010. The increase was driven by growth in all
segments of activity.
Deposits from the public totaled NIS 231.8
billion compared with NIS 234.0 billion at the end of 2010. The
decrease is mainly a result of a shift in the volume of short-term
corporate deposits, while core deposits increased in the retail and
commercial segments.
Equity attributed to the shareholders of the Bank
totaled NIS 22,974 million as at March 31, 2011, compared
with NIS 23,089 million at the end of 2010. The decrease in equity
was the effect of the initial adoption, this quarter, of directives
concerning the measurement and disclosure of impaired debts, which
was offset by the net profit recorded during the quarter.
Total Capital adequacy ratio stood at 14.1% at
the end of the first quarter of 2011 similar to that at the end of
2010.
Core Tier 1 Capital Ratio stood at 8.1% at the
end of the first quarter of 2011, compared to 8.2% at the end of
2010. These ratios significantly exceed the targets established by
the Bank's Board of Directors.
The decrease in the capital adequacy ratio was the result of the
initial adoption, this quarter, of directives concerning the
measurement and disclosure of impaired debts, and from an increase
in risk weighted assets which were offset by the net profit
recorded during the quarter.
Shortly before the approval of the financial statements, the
Bank received regulatory approval from the Supervisor of Banks to
distribute a dividend, at a rate of approximately 30%, from its
first quarter 2011 earnings. This matter will be discussed by the
Board of Management and Board of Directors of the Bank in the near
future.
Conference Call Information
Bank Hapoalim will host a conference call today to review
first-quarter financial results at 10:00 a.m. Eastern Time /3:00
p.m. GMT / 5:00 p.m. Israel. To access the call, please dial:
1-866-485-2399 or 1-888-668-9141 in the U.S. and Canada or (972-3)
918-0664 for international participants. No password is required.
The presentation slides, earnings release and the first quarter
2011 financial statement will be available at the Firm'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. on Tuesday, May 31, through 1:00 p.m. ET
June 6, 2011, by telephone at (972) 3-9255928 (international).
The replay will also be available by audio playback on
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 270 branches, eight regional
business centers, a growing network of 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 and Latin
America, Europe, the Far East, Turkey and Australia. In these
markets, the Bank is engaged in trade, corporate finance, private
banking and retail banking.
Bank Hapoalim is the only Israeli Bank listed on both the Tel
Aviv and London 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 |
in NIS Millions |
| Profit
and profitability |
For the three
months ended on |
| |
3/31/2011 |
12/31/2010 |
9/30/2010 |
6/30/2010 |
3/31/2010 |
| Profit from financing activity
before expenses in respect of credit losses |
2,252 |
2,133 |
2,053 |
1,837 |
1,752 |
| Operating and other income |
1,275 |
1,341 |
1,217 |
1,334 |
1,217 |
| Total income |
3,527 |
3,474 |
3,270 |
3,171 |
2,969 |
| Expenses in respect of credit
losses |
14 |
100 |
290 |
341 |
299 |
| Operating and other expenses |
2,107 |
2,334 |
2,064 |
1,984 |
1,928 |
| Net operating profit attributed to the
shareholders of the Bank |
902 |
701 |
538 |
512 |
461 |
| Profit from extraordinary transactions,
after taxes, before attribution to non-controlling interests |
1 |
12 |
2 |
1 |
1 |
| Net profit attributed to the
shareholders of the Bank |
903 |
713 |
540 |
513 |
462 |
| |
|
|
|
|
|
| Balance Sheet – Principal
Items |
3/31/2011 |
12/31/2010 |
9/30/2010 |
6/30/2010 |
3/31/2010 |
| Total balance sheet |
319,466 |
320,876 |
302,615 |
307,317 |
299,845 |
| Credit to the public, net |
229,835 |
225,288 |
220,665 |
217,749 |
213,203 |
| Securities |
28,932 |
31,604 |
28,935 |
26,980 |
26,516 |
| Deposits from the public |
231,769 |
233,965 |
217,554 |
225,237 |
223,216 |
| Bonds and subordinated notes |
28,295 |
27,608 |
25,920 |
22,555 |
21,395 |
| Equity attributed to the shareholders
of the Bank |
22,974 |
23,089 |
22,307 |
21,667 |
21,195 |
| Total problematic debts as reported in
the past |
-- |
14,895 |
16,145 |
16,755 |
15,458 |
| Total problematic credit risk under the
new directive* |
13,590 |
14,506 |
-- |
-- |
-- |
| Of which: impaired
debts* |
7,735 |
8,259 |
-- |
-- |
-- |
| |
|
|
| |
|
|
| |
|
For the three
months ended on |
| |
Principal financial
ratios |
3/31/2011 |
12/31/2010 |
9/30/2010 |
6/30/2010 |
3/31/2010 |
| |
|
|
|
|
|
|
| |
Loan to Deposit Ratio |
99.2% |
96.3% |
101.4% |
96.7% |
95.5% |
| |
Loan to Deposit ratio
including Bonds & Notes |
88.4% |
86.1% |
90.6% |
87.9% |
87.2% |
| |
Shareholders' equity to total
assets |
7.2% |
7.2% |
7.4% |
7.1% |
7.1% |
| |
Core Tier I capital to risk assets
(Basel II) |
8.1% |
8.2% |
8.1% |
7.9% |
7.9% |
| |
Tier I capital to risk assets (Basel
II) |
8.9% |
9.1% |
8.9% |
8.8% |
8.8% |
| |
Total capital to risk assets (Basel
II) |
14.1% |
14.1% |
13.9% |
13.6% |
13.9% |
| |
Cost-Income Ratio |
59.7% |
67.2% |
63.1% |
62.6% |
64.9% |
| |
Financing margin on regular activity
(a)(b) |
2.62% |
2.61% |
2.65% |
2.67% |
2.54% |
| |
Ratio of credit loss expenses to
total credit to the public (a)(c) |
0.02% |
0.45% |
0.47% |
0.52% |
0.57% |
| |
Return of operating profit on equity,
net(a) |
16.8% |
13.0% |
10.2% |
9.9% |
9.2% |
| |
Return of net profit on equity(a) |
16.8% |
13.2% |
10.2% |
9.9% |
9.2% |
| |
Basic Net profit per share |
0.68 |
0.54 |
0.41 |
0.39 |
0.35 |
| |
Diluted Net profit per share |
0.67 |
0.54 |
0.40 |
0.38 |
0.35 |
| |
|
| |
(a) Calculated on an annualized
basis |
| |
(b) Calculation: - Financing
profit from regular activity divided by financial assets which
generated financing income. |
| |
(c) In the three month
period ended on March 31, 2011, calculated as the rate of expenses
in respect of credit losses out of the recorded balance of credit
to the public. |
| |
* Excluding individual
provision and provision according to extent of arrears |
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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