Hapoalim reclaims top bank spot

The NIS 2.75b profit for 2011 was the highest among Israel's banks.

Bank Hapoalim (TASE: POLI) reported 24% profit growth for 2011, with NIS 2.75 billion (NIS 2.07 per share), compared with NIS 2.2 billion in 2010. Revenue rose 2% to NIS 13.08 billion in 2011 from NIS 12.83 billion in 2010.

Fourth quarter revenue rose to NIS 3.23 billion from NIS 2.96 billion for the fourth quarter of 2010, and net profit rose to NIS 674 million from NIS 471 million. Profit from financing operations before the provision for credit losses rose to NIS 2.09 billion for the fourth quarter from NIS 1.75 billion in 2010, but the provision for credit losses fell to NIS 363 million from NIS 498 billion.

Bank Hapoalim beat the "Globes"-Psagot Investment House Ltd. analysts' consensus of NIS 1.93 earnings per share on NIS 10.92 billion revenue. The consensus for the fourth quarter was earnings per share of NIS 0.36 on NIS 2.41 billion revenue.

Net return on equity rose to 12% in 2011 from 10.4% in 2010, and the capital adequacy ratio rose to 14.1% at the end of 2011 from 13.9% a year earlier. The core tier-1 capital adequacy ratio declined to 7.9% at the end of 2011 from 8% a year earlier.

Profit from financing operations before the provision for credit losses rose to NIS 8.23 billion in 2011 from NIS 7.77 billion in 2010, and the provision for credit losses rose to NIS 1.2 billion from NIS 1.03 billion.

Credit to the public rose 9.4% to NIS 246.5 billion at the end of 2011 from NIS 225.3 billion a year earlier, and deposits from the public rose 9.6% to NIS 256.4 billion from NIS 234 billion.

The salary cost of Bank Hapoalim CEO Zion Kenan was NIS 9.04 million in 2011, including NIS 2.09 million in salary and a bonus of NIS 5.61 million. The salary cost of chairman Yair Seroussi was NIS 9.35 million.

Kenan said, “Above all, these results demonstrate Bank Hapoalim's renewed leadership of the Israeli banking system, especially considering that they were achieved amid ongoing economic uncertainty and recurring turmoil in the global financial markets.

"The growth in net profit and the double-digit return on equity, alongside the improvement in capital adequacy, vividly reflect the strength of our core banking business and our commitment to achieve sustainable returns for the bank's shareholders, while taking into consideration the bank's risk appetite and the macro-economic conditions both in the Israeli economy and in the global economy."

Seroussi said, "In 2011, Bank Hapoalim regained leadership of the banking sector." He added, "We are beginning to reap the benefits of the clear multi-year strategic plan we presented three years ago."

Bank Hapoalim's share price fell 1.7% in early trading to NIS 13.85, giving a market cap of NIS 18.7 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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