In its financials for the first quarter of 2011, Bank Hapoalim (LSE: 80OA; TASE: POLI) reported this morning that profit rose to NIS 903 million, up from NIS 462 million in the corresponding quarter of 2010.
Bank Hapoalim announced that it will be distributing a dividend for the first time since 2008. The dividend will be up to 50% of the net profit and will be distributed every half year.
Bank Hapoalim's return on equity in the first quarter rose to 16.8% from 9.2% in the corresponding quarter, and the capital adequacy ratio was 14.1% for the quarter, similar to the corresponding quarter.
Profit from regular financing operations (excluding one-time items) rose to NIS 1.98 billion for the first quarter from NIS 1.83 billion for the corresponding quarter, due to increased assets and a wider financial margin to 2.62%. Profit from financing activity before expenses for credit losses (previously known as the provision for doubtful debts) rose to NIS 2.25 billion for the first quarter from NIS 1.75 billion for the corresponding quarter. Most of the increase was due to a positive revaluation for fair value of derivative instruments compared with a negative revaluation in the corresponding quarter, plus higher profits from regular financing operations.
For the first time since 2007, the expectation is that Bank Hapoalim's profit will be higher than that of Bank Leumi (TASE:LUMI).
The reason for Hapoalim's high profit is the very low expenses for credit losses of NIS 14 million in the first quarter, down from NIS 299 million in the corresponding quarter. This is the result of an impressive recovery and the significant collection of debts that had been written off in the past but have now been repaid due to an improvement in the loan takers circumstances.
Hapoalim's credit to the public rose 2% in the first quarter to NIS 229.8 billion, and deposits by the public rose 0.9% to NIS 231.8 billion. Operating income amounted to NIS 3.52 billion, compared with NIS 2.96 billion in the corresponding quarter. Financing profit rose 8.5% to NIS 1.98 billion.
Bank Hapoalim is headed by president and CEO Zion Kenan, and controlled by Shari Arison.
Published by Globes, Israel business news - www.globes-online.com - on May 31, 2011
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