Hapoalim posts NIS 7.4b 2023 profit, cuts dividend to 20%

Bank Hapoalim branch  credit: Aviv Gottlieb
Bank Hapoalim branch credit: Aviv Gottlieb

The lower dividend is in line with recent Bank of Israel guidelines. The net profit is 12.7% higher than in 2022.

Bank Hapoalim (TASE: POLI) posted a net profit of NIS 7.4 billion in 2023, and a return on equity of 15%. This compares with a profit of NIS 6.5 billion in 2022, and represents an increase of 12.7%, which mainly arose from growth in revenue, partly offset by a rise in credit loss provisions.

The bank’s fourth quarter and full year 2023 financials published this morning show a profit of NIS 1.6 billion in the fourth quarter, similar to the profit for the fourth quarter of 2022, and slightly higher than the third quarter 2023 profit of NIS 1.67 billion. The annualized return on equity for the fourth quarter of 2023 was 14%, which compares with 15.3 % in the fourth quarter of 2022.

Bank Hapoalim provided NIS 453 million for credit losses in the fourth quarter of 2023. "In the light of the rise in uncertainty and the dangers to the economy because of possible consequences of the war (a estimated at the time of publication) the bank continued to increase its general provision for credit loses in the fourth quarter. The amount provided consists mainly of a general provision and automatic write-offs. In total, the bank provided NIS 1.88 billion for credit losses in 2023, which was mainly a general provision, together with a rise in automatic write-offs," the bank explains. In other words, Bank Hapoalim has still not identified significant credit failures on the part of specific borrowers.

Bank Hapoalim’s credit portfolio grew by 4.8% in 2023 to NIS 407.4 billion.

The high interest rate environment, however, led to a decline in credit to private customers and small businesses. Credit to private individuals totaled NIS 37.7 billion at the end of 2023, 3.1% less than at the end of 2022. Credit to small businesses in Israel totaled NIS 32.7 billion at the end of 2023, 6.5% less than a year earlier.

On the other hand, Bank Hapoalim’s mortgage portfolio grew by 2.6% last year, to 131.1 billion.

Bank Hapoalim will distribute a dividend of 20% of its fourth quarter profit, which is half the dividend rate in its normal dividend policy. This follows new guidelines form the Bank of Israel to the banks. The quarterly dividend will therefore be NIS 352 billion (NIS 0.263 per share), payable on April 8, 2024. This brings the total dividend for 2023 to NIS 2.26 billion.

Published by Globes, Israel business news - en.globes.co.il - on March 7, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Bank Hapoalim branch  credit: Aviv Gottlieb
Bank Hapoalim branch credit: Aviv Gottlieb
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