Bank Hapoalim, Leumi Advance as Profit Rises: Tel Aviv Mover
Hapoalim shares advanced 2.3 percent, the most since July 11 at 11:30 a.m. in Tel Aviv. Leumi’s stock gained 1.8 percent to 11.81 shekels, the highest level since Aug. 26. The benchmark TA-25 Index of stocks increased for the second day, adding 0.6 percent. The Tel Aviv Banking index of the country’s five largest commercial lenders advanced 1.7 percent, the biggest jump since July 11.
Net income at Bank Leumi rose 69 percent to 474 million shekels ($130 million) as loan-loss provisions dropped 75 percent to 84 million shekels, the country’s second-biggest lender said in an e-mailed statement. Profit at the largest competitor Hapoalim increased eight percent to 655 million shekels as provisions fell 13 percent to 301 million shekels, the bank said in an e-mailed statement.
“Credit quality is improving because corporates are deleveraging,” Terence Klingman, head of research at Psagot Investment House Ltd., said today by phone from Tel Aviv. Leumi’s profit fell short of Psagot’s forecast of 556 million shekels while Hapoalim’s surpassed the 617-million shekel estimate.
Israel’s banks are paring corporate lending as holding companies, such as IDB Holding Corp. (IDBH), restructure debt and lenders meet tougher capital adequacy directives from the Bank of Israel. Loans to households are increasing as the nation’s economic growth jumped to 5.1 percent in the second quarter, compared with a 3 percent median estimate of eight economists surveyed by Bloomberg.
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