Bank Hapoalim Earns 2.5 Billion Shekels: Impact of New Banking Tax
The bank's return on equity stood at 15%, a figure that would have been higher without the special tax imposed by the Ministry of Finance this year.
Bank Hapoalim, under the management of Yadin Antebi, recorded a net profit of 2.5 billion shekels in the second quarter, a decrease of 2% compared to the same quarter last year. The results were impacted by the decline in the interest rate environment and the cost of the special tax imposed on banks, which for Bank Hapoalim is estimated at approximately 950 million shekels this year. Conversely, the bank noted that the positive state of business in Israel supported its performance during the past quarter.
The bank reported a high return on equity of 15%. This figure would have been higher without the special tax imposed by the Ministry of Finance. Had it not been for the tax, the return on equity would have stood at 16% in annual terms. In the same quarter last year, the return on equity was 16.7%, indicating an erosion in the figure even when neutralizing the tax, which stems partly from the decline in the Bank of Israel interest rate.
Credit volume continued to grow at a rapid pace, consistent with the banking system's trend over the last two years. Since the beginning of the year, it has grown by 6.6%. Business and commercial credit grew by approximately 10% in each sector. The rate of non-performing loans (NPL) from the total credit balance stood at 0.50%.
Credit loss expenses in the second quarter amounted to 298 million shekels, a slight decrease compared to 302 million shekels in the same quarter last year. The ratio of credit loss expenses to the average credit balance stood at 0.22% in annual terms.
The bank's board of directors announced a distribution of half of the quarter's profits, totaling 1.24 billion shekels. Of this, the bank will pay 995 million shekels in cash dividends to shareholders, while 249 million shekels will be returned through a share buyback program.
For the first half of the year, net profit stood at 4.6 billion shekels, a decrease of 14% compared to the same period last year. Return on equity fell to 14% from 16.5% at the end of the first half of the previous year, driven by the factors mentioned above.
Commissions and other income collected by Hapoalim in the past quarter amounted to 1.17 billion shekels, a marginal increase. Alongside stable commissions, an increase was recorded in other income, primarily due to profits from the sale of real estate and real estate rights.
