51IR Hapoalim 21

TIDM51IR

RNS Number : 2030S

Hapoalim International NV

07 March 2019

RNS Notification

7 March 2019

Offering Circular dated 30 July 2015 in respect of the USD 2,500,000,000 Global Medium Term Programme (the "Programme") of Hapoalim International N.V. (the "Issuer"), as amended, restated or supplemented from time to time (the "Offering Circular")

RE: Notification in respect of certain events affecting Bank Hapoalim B.M., the guarantor of the Issuer's obligations under the Programme

Terms used but not otherwise defined herein shall have the meanings ascribed to them in the Offering Circular.

The Issuer makes the following announcement in respect of Bank Hapoalim B.M., the guarantor of the Issuer's obligations under the Programme (the "Guarantor"):

The Guarantor has published the attached immediate report on an expected material provision in the annual financial statements for 2018 with respect to investigations of the U.S. authorities:

LEI of the Guarantor: B6ARUI4946ST4S7WOU88

Class and sub-class of regulated information: Ongoing regulated information - Inside information

For further information please contact:

Gilad Bloch

Secretary of the Bank

Bank Hapoalim B.M.

   Direct Dial:            +972 (0)3 567 3800 
   Email:                   gilad.bloch@poalim.co.il 

The following is an unofficial translation of the Hebrew report and has been prepared for convenience only.

In case of any discrepancy, the Hebrew version prevails.

Bank Hapoalim B.M.

Number with the Registrar: 520000118

   Securities Authority    Tel Aviv Stock Exchange Ltd.   Tav 053    Transmitted via Magna: 07/03/2019 

www.isa.gov.il www.tase.co.il (Public) Reference: 2019-01-019846

Immediate Report on an Event or Matter Outside the Normal Business of the Corporation

Regulation 36 of the Securities (Periodic and Immediate Reports) Regulations, 5730-1970

Results of an issue should be reported on Tav 20 and not on this form.

A report on the rating of bonds or the rating of a corporation

should be filed under Form Tav 125.

   A Report on:   R   A report the submission of which was delayed 

Nature of the Event: Expected material provision in the annual financial statements for 2018 with respect to investigations of the U.S. authorities

   1.   Attached report 

Immediate_Report - Expected material provision - 070319_isa.pdf

   2.   The date and time when the corporation first learned of the event or the matter: 
                 06/03/2019   at 16:05 p.m. 

-- __________

A Report Which Was Delayed in Accordance with Regulation 36 (b):

   3.   If the report was delayed - the reason for the delay in its submission: 

See in the report

   4.   On 05/03/2019 at 21:30 the impediment to making the report was removed. 
   5.   The company is an enveloping company as defined in the TASE Rules and Regulations 

Names of the signatories on behalf of the corporation and their job titles:

Yael Almog, Chief Legal Adviser

Ofer Levy, Chief Accountant

Signed on 07.03.2019

The reference numbers of the previous documents on the subject (any citation made does not constitute inclusion by way of reference): 2018-01-108468

The securities of the corporation are listed for trading on the Tel Aviv Stock Exchange

Date on which the structure of the form was updated: 19/02/2019

Abbreviated Name: Poalim

Address: POB 27, Tel Aviv 6100001 Telephone: 03-567 3800. 03-567 3333, Fax: 03-567 4576

Electronic Mail: gilad.bloch@poalim.co.il Company Website: http://www.bankhapoalim.co.il

Previous names of reporting entity:

Name of Electronic Reporter: Bloch Gilad, His Job Title: Secretary of the Bank, Name of Employing Company:

Address: Yehuda Halevy 63, Tel-Aviv 6578109 Telephone: 03-567 3800 Fax: 03-567 4576,

Electronic Mail gilad.bloch@poalim.co.il

Head Office

63 Yehuda Halevi St., Bank Hapoalim Bldg., Tel Aviv 65781

Tel: 972-3-5673800; Fax: 972-3-5674576

Date: March 7(th) , 2019

   To                                                                                              To 

Securities Authority The Tel Aviv Stock Exchange Ltd.

   22 Canfey Nesharim Street                                                     2 Ahuzat Bayit Street 
   Jerusalem                                                                                 Tel Aviv 

Ladies and Gentlemen,

Re: Immediate Report

Nature of Event: Expected material provision in the annual financial statements for 2018 with respect to investigations of the U.S. authorities

Further to the aforesaid in Note 10C to the Financial Statements of Bank Hapoalim B.M. (the "Bank") for the third quarter of 2018, (pages 190-194), the Bank hereby announces the following:

In recent weeks, the Bank continued to hold discussions with the United States Department of Justice (the "DOJ"). As part of the meetings with the DOJ, discussions have begun in respect to the methodology for calculating the amounts that the Bank Group will be required to pay in the framework of a possible resolution. As a result, and based on additional data collected and processed during said period by the Bank Group, the Bank is expected to increase in its annual financial statements for 2018 the amount of the provision recorded in relation to the exposure stemming from the investigations of the U.S. authorities, by approximately USD 246 million (approximately NIS 922 million), resulting in the aggregate provision recorded as of December 31, 2018 to be approximately USD 611 million (approximately NIS 2,290 million).

The aforesaid amounts include provision for the three components that, in the Bank's best judgement, as of the date hereof and based on the opinion of the Bank's U.S. legal counsel further to progress in the abovementioned discussions with the DOJ, are expected to be included in a resolution, if and when reached, namely - the component of tax that certain U.S. customers of the Bank's Group were liable to pay to the U.S. tax authorities, the component of income from U.S. customers and a component of penalty which the Bank Group may be required to pay. In addition, the aforesaid amounts include a provision equal to 30% of the provision recorded in respect to the DOJ due to exposure to other authorities in the United States (the aforesaid, in accordance with the instruction of the Banking Supervision Department given to the Bank with respect to the Bank's financial statements for December 31, 2016 - see statement on this matter in Note 26D to the Bank's Annual Financial Statements for 2016).

It is clarified that the investigations by the U.S. authorities are ongoing, no agreement has been reached with respect to an agreed resolution or resolutions (to the extent reached) with any of the U.S. authorities, and no agreement has been reached with respect to the amount that the Bank will be required to pay to the U.S. authorities and with respect to the type of resolution. The gathering, analysis and validation of the quantitative data also continue in accordance with the requirements of the U.S. authorities.

As at the date hereof, based on the opinion of the Bank's U.S. legal counsel and the Bank's professional advisors, the Bank is unable to reasonably estimate the scope of exposure or the range of exposure of the Bank Group in connection with the investigations by the U.S. authorities. Accordingly, in accordance with generally accepted accounting principles, the provision included by the Bank is calculated based on the estimated minimal exposure amount reached based on the methodology presented to the DOJ, the discussions with the DOJ, and the quantitative information at the Bank's disposal as at the date of the report. The overall amounts that the Bank Group will pay in the framework of resolutions with the U.S. authorities (to the extent reached), are likely to be significantly higher than the aggregate provision that the Bank is expected to record in its financial statements for December 31, 2018.

On March 6, 2019 the Board of Directors of the Bank approved the expected increase of the provision as described above. Nevertheless, the information included in this report is based on data which is subject to supplementation, updates and validation, and the data has not undergone a final review by the external auditors and does not constitute audited data. Accordingly, it is possible that the actual provision that will be recorded in the Annual Financial Statements for 2018, due to be published in the second half of March 2019, will be different from the amounts mentioned above in this report. It is noted that, for the sake of caution, the Bank has, until now, withheld disclosure with respect to some of the information included in this report during the period of the recent meetings with the DOJ (the most recent of which took place on March 5, 2019), in view of a concern to jeopardize the discussions with the DOJ.

The provision does not constitute admission of any claim that may be directed at the Bank Group.

   (signed)                                                      (signed) 
   _______________________________     _______________________________ 
   Yael Almog                                         Ofer Levy 
   Chief Legal Adviser                          Chief Accountant 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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March 07, 2019 07:19 ET (12:19 GMT)