Hapoalim, Leumi Profits Up

(Reuters) -
The Bank Hapoalim branch on King George Street, Yerushalayim. (Meital Cohen/Flash90)
The Bank Hapoalim branch on King George Street, Yerushalayim. (Meital Cohen/Flash90)

Bank Hapoalim, Israel’s largest lender, reported higher quarterly profit that beat expectations on higher income from fees and a gain in its provision for credit losses.

Hapoalim on Thursday posted first-quarter net profit of 753 million shekels ($215.6 million), compared with 621 million a year earlier and above expectations of 638 million shekels in a Reuters poll of analysts.

Net financing income was little changed at 2.056 billion shekels from 2.057 billion, while it had a gain in its provision for credit losses of 15 million shekels compared with a charge of 257 million.

Fees and other income increased to 1.299 billion shekels from 1.287 billion.

Hapoalim’s core Tier 1 capital ratio to risk-weighted assets was 9.44 percent according to Basel III, up from 9.15 percent on January 1.

The bank’s board approved a dividend of 106 million shekels for the first quarter, unchanged from the fourth quarter.

Bank Leumi, Israel’s second-largest lender, reported a 10 percent rise in quarterly profit as it recorded income in its provision for credit losses.

Leumi said on Thursday it earned 625 million Israeli shekels ($179 million), up from 570 million a year earlier.

It posted income in respect to credit losses of 51 million shekels, compared with an expense of 73 million in the first three months of 2013. Net interest income slipped 0.3 percent to 1.757 billion shekels.

The bank had a gain of 70 million shekels from the sale of Partner Communications shares, while it recorded a gain of 180 million the prior year.

Leumi was forecast to earn 514 million shekels and record a credit loss expense of 114 million, according to a Reuters poll of analysts.

It said the bank was continuing an efficiency program that further lowered salary expenses.

Leumi’s ratio of Tier I capital to risk elements in Basel III terms rose to 9.41 percent from 9.2 percent at the end of 2013 — above a mandate of 9 percent by the start of 2015.

During the quarter, Leumi’s share of credit to households and small businesses grew 0.9 percent from the end of 2013, while the share of commercial and corporate credit declined 0.7 percent.