Bank Hapoalim (TASE: POLI) has become the first Israeli bank to publish its results for the third quarter of 2023. The bank reported very high net profit of NIS 1.67 billion in the third quarter, after a profit of NIS 4 billion in the first half of the year. Third quarter net profit was down from NIS 1.92 billion in the second quarter and 6.5% down from NIS 1.79 billion in the corresponding quarter of 2022.
The reason for such high profitability has been the rise in interest rates over the past 20 months which has seen the profits of all Israel's banks soar. The fall in profits in the third quarter compared with last year is because Hapoalim has set aside funds for bad debts because the war and higher interest rates may make it difficult for some to repay loans.
Bank Hapoalim has set aside NIS 662 million for credit losses in the third quarter compared with just NIS 45 million in the corresponding quarter of 2022.
Because of the war, Hapoalim has cut its dividend from 40% of profit to 20% of profit following the request of Supervisor of Banks Daniel Hahiashvili. The bank will pay a dividend of NIS 334 million, or NIS 0.25 per share, which will be distributed on December 6.
Bank Hapoalim also estimates that if the public takes advantage of all the benefits it is offering because of the war, the cost will amount to NIS 420 million.
The bank's return on capital stands at 13.4%, down from 15.9% in the corresponding quarter of 2022 and 15.8% in the preceding quarter.
Published by Globes, Israel business news - en.globes.co.il - on November 16, 2023.
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