Hapoalim posts NIS 1.65b Q1 profit but still no dividend

Bank Hapoalim  credit: Tamar Matsafi
Bank Hapoalim credit: Tamar Matsafi

Because of rapid credit growth, requiring a high capital allocation, the bank has decided not to declare a dividend for the second quarter in succession.

This morning, Bank Hapoalim (TASE: POLI) released its first quarter financials, showing a profit for the quarter of NIS 1.654 billion, 22.2% higher than in the corresponding quarter of 2021. The increase is profit is attributed to continued growth in the bank's business, and also to changes in the CPI and to reversals of credit loss provisions.

Despite this, the bank has decided not to declare a dividend for the second quarter in succession, because of the rapid growth in its credit portfolio, chiefly in credit for real estate and construction, which has entailed a large allocation of capital against the credit awarded, and also because of the decline in bond yields, which has affected the bank's shareholders' equity.

"The bank aspires to return to routine dividend distributions in the near future, while maintaining balanced growth, and it believes that the level of the bank's capital ratios as reflected in these financial statements, and the extent of its growth, are important milestones on the way to the possibility of renewing dividend distributions for the second quarter of 2022 and onwards. Dividend distributions and their size will be subject to, among other things, the bank's results, trends and developments in the markets and in macro-economic conditions, the effect of implementing future regulatory directives, and will be in accordance with the tests applicable under law," the bank stated.

Nevertheless, immediately after the financial statements were released, Bank Hapoalim announced that it was implementing a compensation plan it decided on last year, and that it was carrying out a private allocation of shares to CEO Dov Kotler, to eleven members of senior management, to 91 managers, and to several managers who retired last year, amounting to NIS 11.5 million. Of this, Kotler himself will receive stock-based compensation of more than NIS 96,000 in the form of shares that will be locked up for three years (from the end of 2021).

Credit to the public amounted to NIS 364.3 billion at the end of the first quarter, 3.3% more than at the end of 2021. As demand for home loans continued to be strong, the bank increased its housing credit portfolio by NIS 4.6 billion, representing 4.1% growth in the quarter.

Commercial credit grew 3.7% in the quarter, corporate credit grew 2.7%, and credit to small businesses grew 1.4%.

Published by Globes, Israel business news - en.globes.co.il - on May 23, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Bank Hapoalim  credit: Tamar Matsafi
Bank Hapoalim credit: Tamar Matsafi
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018