TEL AVIV, Israel, Aug. 25, 2010 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (Pink Sheets:BKHYY) continues to show improving results in the second quarter.
Highlights of the financial statements:
- Net Profit increased in the second quarter of 2010 to NIS 513 million compared with a profit of NIS 382 million in the same quarter last year, an increase of 34.3%.
- Return on equity improved in the second quarter of 2010 and reached 9.9%, on an annualized basis, compared with 8.3% in the same quarter last year.
- Profit from regular financing activity rose to NIS 1,876 million in the second quarter of 2010 compared with a profit of NIS 1,686 million in the same quarter last year, an increase of 11.3%.
- Operating and other income increased in the second quarter of 2010 to NIS 1,334 million compared with NIS 1,196 million in the same quarter last year, an increase of 11.5%.
The first half of 2010 was marked by the implementation of the Bank's strategic plan:
During the period, the Bank's activity in the commercial sector gained momentum, with new customers' recruited and new business branches opened, in line with the planned trajectory. In retail banking, the Bank continues to focus on its customers and on growth in the mortgage market. The Bank has maintained its leadership in the area of direct banking services, with 1,200,000 customers using these services and 800,000 customers managing their accounts via Internet.
Main developments in the financial statements for the second quarter of 2010:
Profit from regular financing activity (profit from financing activity excluding exceptional and other irregular items) totaled NIS 1,876 million in the second quarter of 2010, compared with a profit of NIS 1,827 million in the previous quarter and NIS 1,686 million in the same quarter last year. The increase results mainly from an increase in the financial margin from regular activity which stood at 2.67% in the second quarter of 2010, compared with 2.54% in the previous quarter and 2.34% in the same quarter last year. This improvement reflects the initial influence of the increase in the interest rate.
Profit from financing activity before provision for doubtful debts totaled NIS 1,837 million in the second quarter of 2010, compared with a profit of NIS 1,752 million in the previous quarter and NIS 1,955 million in the same quarter last year. Despite the increase in profit from regular financing activity in the second quarter, the reported financing profit decreased compared to the same quarter last year mainly due to the adjustment to fair value of derivative instruments and also as a result of non-recurrent income from the credit derivatives portfolio recorded in the same quarter last year.
The provision for doubtful debts in the second quarter of 2010 totaled NIS 341 million, compared with NIS 299 million in the previous quarter and NIS 538 million in the same quarter last year.
The rate of the specific provision to total credit to the public, net, reached 0.52%, in the second quarter of 2010, compared with 0.57% in the previous quarter and 0.80% in the same quarter last year.
Operating and other income totaled NIS 1,334 million in the second quarter of 2010 compared with NIS 1,217 million in the previous quarter and NIS 1,196 million in the same quarter last year. The increase was mainly due to an increase in income from handling credit transactions and credit cards fees.
Operating and other expenses totaled NIS 1,984 million in the second quarter of 2010 compared with NIS 1,928 million in the previous quarter and NIS 1,855 million in the same quarter last year. The increase was mainly due to an increase in other expenses, while salary expenses were maintained.
Contribution to the community - the Bank's employees are involved in a varied and extensive range of community-oriented activities that take the form of social involvement, monetary donations, and large-scale volunteer activities. The Bank Group's activity during the first half of 2010 was expressed in a financial value of approximately NIS 21 million.
Developments in Balance-Sheet Items
The consolidated balance sheet as at June 30, 2010 totaled NIS 307.3 billion, compared with NIS 299.8 billion at the end of the first quarter of 2010.
Credit to the public as at June 30, 2010 totaled NIS 217.7 billion, compared with NIS 213.2 billion at the end of the first quarter of 2010, an increase of 2.1%. The increase stems mainly from growth in all segments of activity.
Deposits from the public totaled NIS 225.2 billion compared with NIS 223.2 billion at the end of the first quarter of 2010, an increase of 0.9%. The increase is mainly a result of a rise in the volume of retail deposits.
Shareholder's equity totaled NIS 21,667 million as at June 30, 2010, compared with NIS 21,195 million at the end of the first quarter of 2010, an increase of 2.2%.
Core Tier 1 Capital (according to Basel II) stood at 7.9% at the end of the second quarter of 2010, similar to the previous quarter.
Tier 1 Capital (according to Basel II) stood at 8.8% at the end of the second quarter of 2010, similar to the previous quarter.
Capital adequacy ratio (according to Basel II) stood at 13.6% at the end of the second quarter of 2010 compared with 13.9% at the end of the previous quarter.
About Bank Hapoalim
Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group has over 270 branches, eight regional business centers, a growing network of business branches and specialized industry relationship managers for major corporate customers.
The Bank Hapoalim Group includes financial companies involved in investment banking, credit cards, trust services and portfolio management. The Group also has holdings in non-banking sectors.
Internationally, Bank Hapoalim operates through 42 branches, subsidiaries and representative offices, in North and Latin America, Europe, the Far East, Turkey and Australia. In these markets, the Bank is engaged in trade, corporate finance, private banking and retail banking.
Bank Hapoalim is the only Israeli Bank listed on both the Tel Aviv and London Stock Exchange. In addition, a Level-1 ADR is traded "over-the -counter" in New York, under ticker BKHYY.
| Principal Data of the Bank Hapoalim Group | in NIS Millions | ||||
| For the three months ended on | |||||
| Profit and profitability | |||||
| 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | 6/30/2009 | |
| Profit from financing activities before provision for doubtful debts | 1,837 | 1,752 | 2,012 | 1,779 | 1,955 |
| Operating and other income | 1,334 | 1,217 | 1,460 | 1,320 | 1,196 |
| Total income | 3,171 | 2,969 | 3,472 | 3,099 | 3,151 |
| Provision for doubtful debts | 341 | 299 | 536 | 629 | 538 |
| Operating and other expenses | 1,984 | 1,928 | 2,095 | 1,644 | 1,855 |
| Operating profit | 512 | 461 | 465 | 422 | 380 |
| Net profit from extraordinary transactions, after taxes | 1 | 1 | 2 | 3 | 2 |
| Net profit | 513 | 462 | 467 | 425 | 382 |
| For the six months ended on |
For the year ended on |
|||
| 6/30/2010 | 6/30/2009 | 12/31/2009 | ||
| Profit from financing activities before provision for doubtful debts | 3,589 | 2,927 | 6,718 | |
| Operating and other income | 2,551 | 2,327 | 5,107 | |
| Total income | 6,140 | 5,254 | 11,825 | |
| Provision for doubtful debts | 640 | 852 | 2,017 | |
| Operating and other expenses | 3,912 | 3,764 | 7,503 | |
| Operating profit | 973 | 401 | 1,288 | |
| Net profit from extraordinary transactions, after taxes | 2 | 23 | 28 | |
| Net profit | 975 | 424 | 1,316 | |
| Balance Sheet – Principal Items | 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | 6/30/2009 |
| Total balance sheet | 307,317 | 299,845 | 309,555 | 301,894 | 302,844 |
| Credit to the public | 217,749 | 213,203 | 215,788 | 215,638 | 215,973 |
| Securities | 26,680 | 26,516 | 28,055 | 28,170 | 29,489 |
| Deposits from the public | 225,237 | 223,216 | 231,993 | 225,196 | 228,136 |
| Bonds and subordinated notes | 22,555 | 21,395 | 23,112 | 23,307 | 22,162 |
| Shareholders' equity | 21,667 | 21,195 | 20,598 | 20,316 | 19,733 |
| Overall Credit risk -Problematic Debts | 16,755 | 15,458 | 16,636 | 18,687 | 17,693 |
| Of which: non-income bearing debt | 3,730 | 4,052 | 3,976 | 4,152 | 4,369 |
| For the three months ended on | |||||
| Principal financial ratios | 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | 6/30/2009 |
| % | |||||
| Loan to Deposit Ratio | 96.7% | 95.5% | 93.0% | 95.8% | 94.7% |
| Shareholders' equity to total assets | 7.1% | 7.1% | 6.7% | 6.7% | 6.5% |
| Core Tier I capital to risk assets (Basel II) | 7.9% | 7.9% | 7.7% | -- | -- |
| Tier I capital to risk assets (Basel II) | 8.8% | 8.8% | 8.5% | -- | -- |
| Total capital to risk assets (Basel II) | 13.6% | 13.9% | 13.7% | -- | -- |
| Tier I capital to risk assets (Basel I) | -- | -- | 8.6% | 8.2% | 7.8% |
| Total capital to risk assets (Basel I) | -- | -- | 13.7% | 13.3% | 12.8% |
| Cost-Income Ratio | 62.6% | 64.9% | 60.3% | 53.0% | 58.9% |
| Financing margin on regular activity (a)(b) | 2.67% | 2.54% | 2.43% | 2.35% | 2.34% |
| Ratio of specific provision to total credit to the public (a) | 0.52% | 0.57% | 1.12% | 1.21% | 0.80% |
| Return of operating profit on equity, net(a) | 9.9% | 9.2% | 9.4% | 8.8% | 8.2% |
| Return of net profit on equity(a) | 9.9% | 9.2% | 9.4% | 8.8% | 8.3% |
| Basic Net profit per share | 0.39 | 0.35 | 0.35 | 0.32 | 0.29 |
| Diluted Net profit per share | 0.38 | 0.35 | 0.35 | 0.32 | 0.29 |
|
For the six months ended on |
For the year ended on |
||
| 6/30/2010 | 6/30/2009 | 12/31/2009 | |
| Cost-Income Ratio | 63.7% | 71.6% | 63.5% |
| Financing margin on regular activity (a)(b) | 2.51% | 2.02% | 2.36% |
| Ratio of specific provision to total credit to the public (a) | 0.54% | 0.65% | 0.90% |
| Return of operating profit on equity, net(a) | 9.4% | 4.3% | 6.6% |
| Return of net profit on equity(a) | 9.5% | 4.5% | 6.7% |
| Basic Net profit per share | 0.74 | 0.32 | 1.00 |
| Diluted Net profit per share | 0.73 | 0.32 | 0.99 |
| (a) Quarterly figures on an annualized basis. | |||
| (b) Calculated - Financing profit from regular activity divided by financial assets which generated financing income. | |||