Bank Hapoalim reports Q3 2024 profit amid strong credit growth and operational resilience

Bank Hapoalim, Israel's leading financial group, announced its financial results for the third quarter of 2024, reporting a net profit of NIS 1,905 million and a return on equity (ROE) of 13.6%.

Despite a slight decrease compared to the previous quarter, the bank demonstrated solid financial performance and strong credit growth across all operational segments.

Key financial highlights

Net Profit: NIS 1,905 million in Q3 2024, a 14.1% increase compared to NIS 1,669 million in Q3 2023.

Return on Equity (ROE): 13.6% for Q3 2024, slightly down from 16.4% in Q2 2024 but consistent with 13.4% in Q3 2023.

Total Income: NIS 5,627 million, reflecting a 6.2% year-over-year increase, driven by higher credit activity and inflation-linked income.

Cost-Income Ratio: 36.6%, maintaining operational efficiency and improved from 38.9% in Q3 2023.

Credit Growth: Total net credit to the public reached NIS 430.4 billion, a 3.4% quarter-over-quarter increase and a 6.4% rise year-over-year.

Operational resilience during the war

The bank's credit portfolio demonstrated significant growth, driven by demand adjustments amidst the ongoing war.

Corporate credit increased by 6.6% quarter-over-quarter, while housing loans rose by 1.8% in the same period.

The allowance for credit losses stood at NIS 8 billion, reflecting the bank's preparedness for potential risks due to the war and economic uncertainty.

Capital and liquidity position

Bank Hapoalim continued to maintain robust capital and liquidity buffers:

CET-1 Capital Ratio: 11.90%, well above the minimum regulatory requirement of 10.23%.

Liquidity Coverage Ratio (LCR): 132%, significantly exceeding the regulatory threshold of 100%.

Dividend and share buyback

The board of directors declared a distribution of 40% of net profit, which includes a cash dividend of NIS 512 million and NIS 250 million allocated to the bank's share buyback plan. The dividend payment is scheduled for December 11, 2024.

New developments and outlook

Bank Hapoalim introduced enhancements to its payment app, Bit, with plans to charge a fee for commercial users and a new feature allowing users to hold stored funds. These developments aim to strengthen the bank's digital services and expand its deposit base.

The bank also announced senior management changes, with Pazit Garfinkel appointed as Head of Retail Banking and Adi Dauber as Head of Financial Markets.

Despite ongoing challenges, Bank Hapoalim's strong financial performance and strategic focus on innovation underscore its resilience and adaptability in a volatile economic environment.