Net Profit totaled NIS 625 million Return on Equity of 10.2% Core Tier 1 Capital of 8.5%

TEL AVIV, Israel, Nov. 29, 2012 (GLOBE NEWSWIRE) --Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced financial results for the third quarter ended September 30, 2012.

Third Quarter 2012 Financial Highlights:

  • Net profit totaled NIS 625 million compared with a profit of NIS 607 million in the second quarter of 2012.
  • Return on equity reached 10.2%, on an annualized basis, similar to the second quarter of 2012.
  • Profit from regular financing activity totaled NIS 2,024 million, similar to the second quarter of 2012.
  • Capital adequacy ratio continued to improve and totaled 15.1% compared to 14.1% at the end of 2011.
  • Core Tier 1 Capital ratio rose to 8.5% compared with 7.9% at the end of 2011.

Main developments in the financial statements for the third quarter of 2012:

Profit from regular financing activity totaled NIS 2,024 million in the third quarter of 2012, compared with a profit of NIS 2,025 million in the previous quarter.

The financial margin from regular activity decreased to 2.30% in the third quarter of 2012, compared with 2.38% in the previous quarter.

Provision for credit losses in the third quarter of 2012 totaled NIS 286 million compared with NIS 344 million in the previous quarter. The rate of provision as a percentage of credit to the public reached 0.45% at the end of the third quarter compared with 0.55% in the previous quarter.The decrease resulted from a decline in the provision for debt examined on an individual basis.

Fees and other income totaled NIS 1,335 million in the third quarter of 2012 compared with NIS 1,266 million in the previous quarter, an increase of 5.5%. The increase resulted mainly in fees from securities and credit card activities.      

Operating and other expenses totaled NIS 2,249 million in the third quarter of 2012 compared with NIS 2,118 million in the previous quarter, an increase of 6.2%, mainly as a result of an increase in VAT taxes and the Bank's share price. 

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 nine months of 2012 was expressed in a financial value of approximately NIS 38 million.

Developments in Balance Sheet Items:

The consolidated balance sheet as at September 30, 2012 totaled NIS 367.4 billion, compared with NIS 356.7 billion at the end of 2011, an increase of 3.0%.

Net Credit to the public as at September 30, 2012 totaled NIS 249.9 billion, compared with NIS 246.5 billion at the end of 2011, an increase of 1.4% mainly as a result of an increase in retail and commercial credit.

Deposits from the public totaled NIS 264.5 billion compared with NIS 256.4 billion at the end of 2011, an increase of 3.1%. The increase is mainly a result of increased core deposits in the retail segment in Israel, which were partially offset by a decrease in deposits in the corporate segment.

Shareholders' Equity totaled NIS 25,759 million as at September 30, 2012, compared with NIS 23,819 million at the end of 2011, an increase of 8.1%, mainly stemming from retained earnings.  

Total Capital Adequacy Ratio stood at 15.1% at the end of the third quarter of 2012 compared to 14.1% at the end of 2011.

Core Tier 1 Capital Ratio stood at 8.5% at the end of the third quarter of 2012, compared to 7.9% at the end of 2011.

Conference Call Information

Bank Hapoalim will host a conference call as well as a slides webcast today to review the third quarter 2012 financial results at 9:00 a.m. U.S. Eastern Time / 2:00 p.m. UK Time / 4:00 p.m. Israel.

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 third quarter 2012 financial statement will be 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 on Thursday, November 29, through 1:00 p.m. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel December 7, 2012, by telephone at (972) 3-9255901 (international).

The 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 280 branches, eight regional business centers, a 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, and Turkey. 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
  Sept. 30, 2012 June 30, 2012 Mar. 31, 2012 Dec. 31, 2011 Sept. 30, 2011
Net financing income*** 2,115 2,041 2,148 1,963* 1,660*
Non-interest income*** 1,335 1,266 1,307 1,272* 1,298*
Total income  3,450 3,307 3,455 3,235* 2,958*
Provision for credit losses 286 344 303 363 498
Operating and other expenses 2,249 2,118 2,104 2,197 2,033
Net profit attributed to shareholders of the Bank 625 607 659 672 471
     
   For the nine months ended  For the year ended
  Sept. 30, 2012 Sept. 30, 2011 Dec. 31, 2011
Net financing income*** 6,304 5,921* 7,884*
Non-interest income*** 3,908 3,932* 5,204*
Total income  10,212 9,853* 13,088*
Provision for credit losses 933 839 1,202
Operating and other expenses 6,471 6,168 8,365
Net profit attributed to shareholders of the Bank 1,891 2,074 2,746
 Balance Sheet – Principal Data 
 
  Sept. 30, 2012 June 30, 2012 Mar. 31, 2012 Dec. 31, 2011 Sept. 30, 2011
Total balance sheet 367,365 362,105 350,350 356,662 ** 341,967 **
Net credit to the public 249,904 248,614 244,804 246,495 244,577
Securities 53,076 40,728 36,903 34,411 27,789
Deposits from the public 264,490 259,668 251,576 256,417 242,931
Bonds and subordinated notes 36,051 35,679 34,422 32,933 32,050
Shareholders' equity 25,759 24,907 24,440 23,819 ** 23,050 **
Total problematic credit risk**** 14,718 13,890 14,498 12,799 13,233
Of which: impaired balance-sheet debts**** 6,988 7,139 6,825 7,044 7,170
 
           
 Main Financial Ratios (%) For the three months ended
  Sept. 30, 2012 June 30, 2012  Mar. 31, 2012 Dec. 31, 2011  Sept.30, 2011
 Net loan to deposit ratio  94.5%  95.7%  97.3%  96.1% 100.7%
 Net loan to deposit ratio including bonds and subordinated notes  83.2% 84.2% 85.6% 85.2% 88.9%
 Shareholders' equity to total assets  7.0% 6.9% 7.0% 6.7% 6.7% 
 Core Tier I capital to risk-adjusted assets  8.5% 8.3% 8.2% 7.9% 7.7%
 Tier I capital to risk-adjusted assets  9.3% 9.1% 9.0% 8.7% 8.5%
 Total capital to risk-adjusted assets  15.1% 14.8% 14.7% 14.1% 13.6%
 Financing margin from regular activity(a)(b)  2.30% 2.38% 2.29% 2.28%* 2.41%*
 Cost-income ratio  65.2% 64.0% 60.9% 67.9%* 68.7%*
Provision for credit losses as a percentage of the average recorded balance of credit to the public (a) 0.45% 0.55% 0.49% 0.61% 0.84%
 Net return of profit attributed to shareholders of the Bank on equity(a)  10.2% 10.2% 11.3% 11.9% 8.5%
 Basic net profit per share in NIS attributed to shareholders of the Bank  0.47 0.46 0.50 0.51 0.36
 Diluted net profit per share in NIS attributed to shareholders of the Bank  0.47 0.46 0.49 0.50 0.35
           
(a) Calculated on an annualized basis.
 
(b) Calculation: Financing profit from regular activity is divided by monetary assets generating financing income. 
Financing profit from regular activity includes net interest income and non-interest financing income.
 
* The Bank adopted the directive of the Supervisor of Banks concerning the format for statements of profit and loss of banking corporations for the first time on January 1, 2012. The directives were adopted by retroactive implementation, with the exception of the cancellation of unpaid accrued CPI linkage differentials on principal in respect of debts classified as impaired prior to the initial implementation. Accordingly, the data included in the statement of profit and loss with regard to comparison periods last year were reclassified for adjustment to the new definition, item headings, and presentation method of the current reporting period. For details, see Note 1(C) 1 to the Condensed Financial Statements. 
 
** Restated, due to the retroactive implementation of the directives of the Supervisor of Banks regarding financial reporting on employee benefits. For further details, see Note 1(D) to the Condensed Financial Statements. 
 
*** Restated due to the initial implementation of International Accounting Standard 12, Taxes on Income, see Note 1(C)(2.2) to the Condensed Financial Statements. 
 
**** Net of the individual allowance and the allowance according to the extent of arrears. 
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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