Bank Hapoalim (TASE: POLI) released its 2021 financials this morning. The bank reported a 149% rise in annual profit, to NIS 4.9 billion, from NIS 2 billion in 2020. The rise is mainly thanks to a reversal of credit loss provisions of over NIS 1.2 billion as macro-economic conditions in Israel continued to improve, and growth in the bank's activity, particularly in home loans.
Net credit to the public in the fourth quarter of 2021 totaled NIS 352.6 billion, compared with NIS 335.3 billion in the preceding quarter, an increase of 5.2%, thereby completing 16.8% growth in 2021. Corporate credit increased by 7.1% and commercial credit increased by 6.4% in the fourth quarter, completing 23.3% and 24.8% growth for the year, respectively. The housing loan portfolio grew by NIS 5 billion in the fourth quarter to NIS 115 billion, up 4.7% over the preceding quarter and 16.1% compared with the end of 2020. Consumer and small business credit increased by 3.3% and 5.9% in the fourth quarter and by 5.1% and 8.1% in 2021, respectively.
Total deposits reached NIS 525.1 billion, an increase of 20.6% compared with the corresponding quarter.
Annualized return on equity for the fourth quarter of 2021 was 9.1%, which compares with 11.8% in the previous quarter and 9.6% in the same quarter of 2020. Return on equity for 2021 was 11.8%.
The bank's Common Equity Tier 1 (CET1) capital ratio at the end of 2021 was 10.96%, and the total capital ratio was 14.22%.
The bank continued expand its investments through Poalim Equity in 2021. Poalim Equity’s contribution to net profit amounted to NIS 268 million, and the balance of investments stood at NIS 3.5 billion at the end of the year. Bank Hapoalim says that it intends to continue to implement its strategy in this area, subject to market conditions, within a multi-year trajectory for investments through 2025 approved by the board of directors.
Bank Hapoalim chairperson Ruben Krupik said, "The bank grew its balance sheet substantially over the last year, building the foundation to enhance its future earnings. The credit portfolio grew at a high rate of approximately 16.8%, demonstrating that the results of the bank are a reflection of economic developments, which have provided strong tailwinds: strong growth momentum in the economy, rising investments in construction, and an increase in property prices, further contributing to demand for credit."
The bank's president and CEO Dov Kotler said, "2021 will be remembered primarily as the year of return to normal routines after the coronavirus crisis. The rebound in the Israeli economy, reflected in high growth rates and low unemployment rates, is the strongest expression of the Israeli economy's resumption of routine functioning, alongside the crisis, which has not entirely receded.
"Despite the waves of Covid-19 cases, over the last year we have shown accelerated growth of our credit portfolio across all segments, and responded to the high demand for credit from our customers, particularly business credit and housing loans. We continued to develop advanced, innovative digital products to help our customers make informed financial decisions; we initiated business collaborations with leading companies to create unique value offers for our customers; we continued to promote new platforms for business in the UAE for our customers; and we recently created a new division dedicated to improving service and operational excellence."
Bank Hapoalim has a market cap of NIS 42.7 billion on the Tel Aviv Stock Exchange after a 35% rise in its share price over the past year. Its share price responded to the 2021 results this morning with a 5.03% fall at the opening stage.
Published by Globes, Israel business news - en.globes.co.il - on March 8, 2022.
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