Bank Hapoalim Announces First Quarter 2014 Financial Results

Bank Hapoalim Announces First Quarter 2014 Financial Results

                      Net Profit totaled NIS 753 million
                          Return on Equity of 10.7%
                     Basel 3 Tier 1 Capital rose to 9.4%
Cash Dividend Payout of NIS 106 million to be paid from First Quarter 2014 Net
                                    Profit

TEL AVIV, Israel, May 22, 2014 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI)
(ADR:BKHYY), Israel's leading financial group, today announced financial
results for the first quarter ended March 31, 2014.

First Quarter 2014 Financial Highlights: 

  *Net profit totaled NIS 753 million compared with a profit of NIS 621
    million in the same quarter last year.
    
  *Return on equity reached 10.7%, compared with 9.5% in the same quarter
    last year.
    
  *Tier 1 Capital Ratio, in Basel 3 terms, stood at 9.44% at the end of the
    first quarter 2014, compared with 9.15% at January 1, 2014.
    
  *Total Capital Ratio, in Basel 3 terms, as at March 31, 2014 was 14.96%
    compared with 14.68% on January 1, 2014.
    
  *Quarterly Dividend - The Bank's Board of Directors approved the
    continuation of the quarterly cash dividend distribution, at a rate of
    approximately 15% of net profit, from its first quarter 2014 earnings in
    the amount of NIS 106 million.

Main developments in the financial statements for the first quarter of 2014:

Profit from regular financing activity totaled NIS 1,795 million in the first
quarter of 2014, up from a profit of NIS 1,773 million in the same quarter
last year.

The financial margin from regular activity stood at 2.1% in the first quarter
of 2014, similar to the same quarter last year.

Provision for credit losses in the first quarter of 2014 recorded income of
NIS 15 million, compared with an expense of NIS 257 million in the same
quarter last year.

Fees and other income totaled NIS 1,299 million in the first quarter of 2014
compared with NIS 1,287 million in the same quarter last year, an increase of
0.9%.

Operating and other expenses totaled NIS 2,156 million in the first quarter of
2014 compared with NIS 2,135 in the same quarter last year.

Dividend declared - The Bank's Board of Directors approved the continuation of
the quarterly cash dividend distribution and declared a dividend with respect
to the first quarter 2014 profits, of approximately NIS 106 million, which
amounts to 8 agorot per share. The record date is May 29, 2014 and the date of
payment is June 12, 2014.

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.
Bank Hapoalim's community-oriented activity during the first quarter of 2014
was expressed in a financial value of approximately NIS 18 million.

Developments in Balance Sheet Items:

The consolidated balance sheet as at March 31, 2014 totaled NIS 376.9 billion,
compared with NIS 380.2 billion at the end of 2013, a decrease of 0.9%.

Net Credit to the public totaled NIS 250.2 billion, compared with NIS 251.6
billion at the end of 2013, a decrease of 0.5% mainly as a result of a
decrease in corporate credit offset by an increase in retail, small business,
and commercial credit.

Credit to Retail customers totaled NIS 102.0 billion compared with NIS 100.4
billion at the end of 2013, an increase of 1.5%. This includes consumer credit
which totaledNIS 32.3 billion compared with NIS 31.4 billion at the end of
2013, an increase of 2.6%. Mortgages totaled NIS 58.4 billion compared with
NIS 57.9 billion at the end of 2013, an increase of 0.9%.

Credit to Small Businesses totaled NIS 26.7 billion compared with NIS 26.2
billion at the end of 2013, an increase of 1.9%.

Credit to the Commercial segment totaled NIS 31.3 billion compared with NIS
31.1 billion at the end of 2013, an increase of 0.4%.

Deposits from the public totaled NIS 276.0 billion compared with NIS 276.5
billion at the end of 2013, a decrease of 0.2%, mainly a result of a shift in
customers' investment preferences.

Shareholders' Equity totaled NIS 29.9 billion as at March 31, 2014, compared
with NIS 29.1 billion at the end of 2013, an increase of 2.7%.

Conference Call Information

Bank Hapoalim will host a conference call as well as a slide presentation
webcast today to review the First Quarter 2014 financial results at 10:00 a.m.
U.S. Eastern Time / 3:00 p.m. UK Time / 5:00 p.m. Israel Time.

To access the call, please dial: 1-888-281-1167 in the U.S. and 1-866-485-2399
in Canada or (972) 3-9180685 for international participants. No password is
required. The presentation slides, earnings release and the First Quarter 2014
financial statements are available at the Bank's website,
www.bankhapoalim.com, under Investor Relations, Financial Information.

A replay of the conference call will be available beginning at approximately
1:00 p.m. U.S. Eastern Time / 6:00 p.m. UK Time / 8:00 p.m. Israel Time on
Thursday, May 22, 2014 through 1:00 p.m. Eastern Time / 6:00 p.m. UK Time /
8:00 p.m. Israel Time on Thursday May 29, 2014 by telephone at (972) 3-9255918
(international).

The webcast replay will also be available by audio playback on the Bank
Hapoalim website at www.bankhapoalim.com, under Investor Relations, Financial
Information.

About Bank Hapoalim

Bank Hapoalim is Israel's leading financial group. In Israel, the Bank
Hapoalim Group has over 260 branches, eight regional business centers, a
network of 22 business branches and specialized industry relationship managers
for major corporate customers.

The Bank Hapoalim Group includes Isracard Ltd, Israel's leading credit card
company as well as financial companies involved in investment banking, trust
services and portfolio management.

Internationally, Bank Hapoalim operates through branches, subsidiaries and
representative offices, in North America, Latin America, Europe, the Far East,
and Turkey. In these markets, the Bank is engaged in trade, corporate finance,
private banking and retail banking.

Bank Hapoalim is listed on the Tel Aviv Stock Exchange. In addition, a Level-1
ADR is traded "over-the-counter" in New York.

For more information about Bank Hapoalim, please visit us online at
www.bankhapoalim.com.

Principal Data of the Bank Hapoalim Group             (NIS millions)
                                                                           
Profit and             For the three months ended
Profitability
                      March 31,  Dec. 31,  Sept. 30,  June 30,  March 31,
                       2014       2013      2013       2013      2013
Net financing income*  2,056      2,073     2,117      2,176     2,057
Fees and other income  1,299      1,394     1,278      1,282     1,287
Total income           3,355      3,467     3,395      3,458     3,344
Provision (income) for (15)       (59)      375        301       257
credit losses
Operating and other    2,156      2,562     2,133      2,135     2,135
expenses
Net profit attributed
to shareholders of the 753        651       653        655       621
Bank

                      March 31,  Dec. 31,  Sept. 30,  June 30,  March 31,
                       2014       2013      2013       2013      2013
Balance Sheet –                                              
Principal Data
Total balance sheet    376,867    380,246   374,216    378,483   370,317
Net credit to the      250,232    251,600   249,341    247,120   247,782
public
Securities             65,333     60,912    60,998     61,137    59,461
Deposits from the      276,014    276,525   269,632    274,601   265,297
public
Bonds and subordinated 31,314     33,980    34,819     35,874    36,222
notes
Shareholders' equity   29,855     29,060    28,391     27,808    27,279
Net total problematic  14,205     16,279    13,870     13,264    13,561
credit risk**
Of which: net impaired 6,305      6,817     6,624      7,030     6,856
balance sheet debts**
                                                            

Main Financial Ratios  March 31,  Dec. 31,  Sept. 30,  June 30,  March 31,
                       2014       2013      2013       2013      2013
Net loan to deposit    90.7%      91.0%     92.5%      90.0%     93.4%
ratio
Net loan to deposit
ratio including bonds  81.4%      81.0%     81.9%      79.6%     82.2%
and subordinated notes
Shareholders' equity   7.9%       7.6%      7.6%       7.3%      7.4%
to total assets
Common equity Tier 1
capital according to   9.4%                                   
Basel 3
Total capital          15.0%                                  
according to Basel 3
Ratio of core capital
to risk-adjusted       --        9.4%      9.3%       9.2%      9.1%
assets according to
Basel 2
Ratio of total capital
to risk-adjusted       --        15.6%     15.7%      15.7%     15.6%
assets according to
Basel 2
Financing margin from
regular                2.09%      2.13%     2.20%      2.16%     2.07%
activity^(1)(2)
Cost-income ratio^(5)  64.3%      61.2%     62.8%      61.7%     63.8%
Total income to        3.6%       3.8%      3.6%       3.7%      3.7%
assets^(3)
Total expenses to      2.3%       2.8%      2.3%       2.3%      2.3%
assets^(4)
Provision (income) for
credit losses as a
percentage of the      (0.02%)    (0.09%)   0.59%      0.48%     0.41%
average recorded
balance of credit to
the public^(1)
Net return of profit
attributed to          10.7%      9.4%      9.6%       9.9%      9.5%
shareholders of the
Bank on equity^(1)
Basic net earnings per
share in NIS
attributed to          0.57       0.49      0.50       0.50      0.47
shareholders of the
Bank
                                                            
* Net financing income includes net interest income and non-interest
income (expenses).
** Net of the individual allowance, the allowance according to the extent
of arrears, and the collective allowance in respect of problematic credit
risk.
(1) Calculated on an annualized basis.
(2) Financing profit from regular activity (see the Board of Directors'
report, in the section Profit and Profitability – Development of Financing
Profit) is divided by total financial assets after allowance for credit
losses, net of non-interest bearing balances in respect of credit cards.
(3) Total income divided by the average balance of total assets.
(4) Total operating and other expenses, divided by the balance of total
average assets.
(5) Does not include expenses for efficiency plans.

CONTACT: For further information please contact:
         Press: Ofra Preuss, Bank's Spokesperson
         Tel: +972-3-567-3635; Fax: +972-3-567-3500
         spokesperson@mailpoalim.co.il

         Investors: Effie Werber, Head of Investor Relations
         Tel. +972-3-567-3440; Fax: +972-3-5673470
         effie.werber@mailpoalim.co.il
 
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