Bank Hapoalim Announces First Quarter 2017 Financial Results

Net Profit totaled NIS 767 million

Return on Equity of 9.2%

Cash Dividend Payout increased to 40%

Dividend in respect of First Quarter profits totaled NIS 307 million

TEL AVIV, Israel, May 24, 2017 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE:POLI) (ADR:BKHYY), Israel's leading financial group, today announced its financial results for the first quarter ended March 31, 2017.

Key financial highlights for the first quarter of 2017:

Net Profit - totaled NIS 767 million, compared with a net profit of NIS 674 million in the same quarter last year, an increase of 13.8%.
Return on Equity - reached 9.2%, compared with 8.4% in the same quarter last year.
Tier 1 Capital Ratio - totaled 11.21% as at March 31, 2017, compared with 11.01% as at December 31, 2016.
Total Capital Adequacy Ratio - totaled 14.90% as at March 31, 2017, compared with 15.11% as at December 31, 2016.
Quarterly Dividend - the Bank has increased its cash dividend payout to a rate of 40% of net profit, and will distribute the amount of NIS 307 million in respect of first quarter profits.

Key developments in the financial statements for the first quarter of 2017:

Profit from regular financing activity totaled NIS 2,121 million in the first quarter of 2017, compared with NIS 2,020 million in the same quarter last year, an increase of 5.0%.

Net provision for credit losses totaled NIS 107 million (0.16% of the average credit to the public) in the first quarter of 2017, compared with a provision of NIS 46 million (0.06%) in the same quarter last year.

Gross provision for credit losses, before recoveries, totaled NIS 358 million (0.52% of the average credit to the public) in the first quarter of 2017, compared with a provision of NIS 304 million (0.43%) in the same quarter last year.

Operating and other income totaled NIS 1,347 million in the first quarter of 2017, compared with NIS 1,336 million in the same quarter last year.

Operating and other expenses totaled NIS 2,217 million in the first quarter of 2017, compared with NIS 2,202 million in the same quarter last year.

Contribution to the community - The Bank continues to lead in contribution to the community in the form of volunteer activities and donations, especially in the field of education, culture and welfare. Bank Hapoalim’s community-oriented activity during the first quarter of 2017 was expressed in a financial value of approximately NIS 14 million.

Key developments in Balance Sheet items for the first quarter of 2017:

The consolidated balance sheet as at March 31, 2017 totaled NIS 445.8 billion, compared with NIS 448.1 billion at the end of 2016, a decrease of 0.5%.

Net Credit to the public totaled NIS 270.0 billion, compared with NIS 272.0 billion at the end of 2016, a decrease of 0.7%.

Credit to Private Customers in Israel totaled NIS 40.5 billion, similar to the end of 2016.

Mortgages in Israel totaled NIS 69.6 billion, compared with NIS 68.8 billion at the end of 2016, an increase of 1.2%.

Credit to Small Businesses in Israel totaled NIS 27.0 billion, compared with NIS 27.3 billion at the end of 2016, a decrease of 1.1%.

Credit to the Commercial segment in Israel totaled NIS 32.6 billion, compared with NIS 32.2 billion at the end of 2016, an increase of 1.2%.

Credit to the Corporate segment in Israel totaled NIS 65.4 billion, compared with NIS 68.0 billion at the end of 2016, a decrease of 3.9%.

Deposits from the public totaled NIS 337.5 billion, compared with NIS 338.5 billion at the end of 2016, a decrease of 0.3%.

Shareholders' Equity totaled NIS 34.9 billion as at March 31, 2017, compared with NIS 34.0 billion at the end of 2016, an increase of 2.5%.

Leverage ratio - defined as the ratio of the capital measurement (Tier 1 capital) to the exposure measurement (total of balance sheet exposures, exposures to derivatives and securities financing transactions, and off-balance sheet items), stood at 7.3% compared with the 6% minimum required by the Supervisor of Banks.

Liquidity coverage ratio - defined as the ratio between the supply of "high-quality liquid assets” to the net expected outgoing cash flow in a stress scenario, stood at 128% at the end of the first quarter of 2017, compared with the Supervisor of Banks' requirement of 100% for the end of 2017.

Conference Call Information:

Bank Hapoalim will host a conference call today at 4:00 p.m. Israel time / 9:00a.m. ET to discuss the results. The call will be accompanied by a slide presentation.

In order to participate, please dial the following numbers, at least ten minutes ahead of the scheduled start time: United States 1-888-281-1167; United Kingdom 0-800-051-8913; International (972) 3-9180685. No password is required.

The slide presentation, earnings release and the first quarter 2017 financial statements will be available on the Bank's website, www.bankhapoalim.com, under Investor Relations, Financial Information.

Following the conclusion of the call, a replay will also be available by audio playback on the Bank Hapoalim website. The replay of the conference call can also be accessed until May 31, 2017 by calling (972) 3-9255918 (international).

Please note: The conference call does not replace the need to peruse the immediate reports and the Financial Statements of the Bank, including all the forward-looking information included therein in accordance with Section 32A of the Securities Law, 1968.

About Bank Hapoalim:

Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group has 235 retail branches, six 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. In addition to the activity in Israel, the Bank Group operates abroad, in the private banking segment and in the business sector, mainly in Europe and the United States. 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
	For the three months ended
	March 31, 2017	December 31, 2016	September 30, 2016		June 30, 2016		March 31, 2016
Main profit and loss data
Net profit attributed to shareholders of the Bank	767	138	699		1,117		674
Net financing profit*	2,255	2,354	2,196		2,586		2,209
Fees and other income	1,347	1,335	1,386		1,319		1,336
Total income	3,602	3,689	3,582		3,905		3,545
Provision (income) for credit losses	107	469	(118	)	(128	)	46
Operating and other expenses	2,217	2,601	2,445		2,242		2,202

	NIS millions
	As at
	March 31, 2017	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Main balance sheet data
Total assets	445,847	448,105			440,188			440,856			434,905
Net credit to the public	269,982	271,957			277,539			278,271			279,850
Securities	74,894	71,449			65,215			67,720			66,154
Deposits from the public	337,518	338,502			326,244			327,500			321,576
Bonds and subordinated notes	31,171	33,560			35,836			36,081			36,836
Shareholders’ equity	34,909	34,047			34,119			34,342			33,336
Net problematic credit risk	8,077	7,600			7,676			8,232			8,725
Net impaired balance sheet debts	2,749	3,110			3,526			3,745			4,134


	For the three months ended
	March 31, 2017			December 31, 2016		September 30, 2016			June 30, 2016			March 31, 2016
Main performance indicators
Return of net profit on equity attributed to shareholders of the Bank⁽¹⁾	9.22		%	1.61	%	8.29	%		13.91	%		8.39	%
Return on assets	0.17		%	0.03	%	0.16	%		0.25	%		0.16	%
Efficiency ratio – cost-income ratio⁽²⁾	61.55		%	63.11	%	61.14	%		57.41	%		62.12	%
Financing margin from regular activity⁽¹⁾⁽³⁾	2.07		%	2.08	%	2.08	%		2.23	%		2.03	%
Common equity Tier 1 capital ratio to risk-adjusted assets according to Basel 3⁽⁴⁾	11.21		%	11.01	%	10.81	%		10.20	%		9.74	%
Total capital ratio to risk-adjusted assets according to Basel 3⁽⁴⁾	14.90		%	15.11	%	15.02	%		14.43	%		13.94	%
Leverage ratio⁽⁴⁾	7.30		%	7.25	%	7.40	%		7.27	%		7.11	%
Liquidity coverage ratio⁽¹⁾⁽⁵⁾	128.00		%	124.00	%	117.00	%		113.00	%		105.00	%

Main credit quality indicators
Allowance for credit losses as a percentage of credit to the public	1.45		%	1.49	%	1.39	%		1.48	%		1.54	%
Provision for credit losses as a percentage of average credit to the public⁽¹⁾	0.16		%	0.67	%	(0.17	%)		(0.18	%)		0.06	%

Net earnings per ordinary share (in NIS)
Basic net earnings per share in NIS attributed to shareholders of the Bank	0.58			0.10		0.52			0.84			0.51

* Net financing profit includes net interest income and non-interest financing income (expenses). (1) Calculated on an annualized basis.
(2) Does not include expenses in respect of the update of the provision in connection with the Bank Group's business with American clients.
(3) Financing profit from regular activity (see the Board of Directors' report, in the section “Material Developments in Income, Expenses, and Other Comprehensive Income”) divided by total financial assets after allowance for credit losses, net of non-interest bearing balances in respect of credit cards.
(4) For additional information, see the section "Capital, Capital Adequacy, and Leverage," below.
(5) For additional information, see the section "Liquidity and Refinancing Risk," below.

Contact:
Karen Mazor, SVP
Head of Investor Relations
Bank Hapoalim
T: +972 54 228 8039
E: Karen.mazor@poalim.co.il

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Bank Hapoalim Announces First Quarter 2017 Financial Results

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