Bank Hapoalim (POLI) Q2 2026 earnings summary

Executive summary

• Q2 net profit was NIS 2.488bn, up 17.1% QoQ and down 2.1% YoY; ROE was 15.0%. H1 net profit was NIS 4.612bn and ROE was 14.0%.

• Q2 ROE excluding the estimated special bank tax impact was ~16.4%; H1 ROE excluding the tax was ~15.4%.

• Credit grew 3.3% QoQ, 14.3% YoY and 6.6% since year-end 2025; NPL ratio was 0.50%.

• Q2 income rose 19.8% QoQ, led by financing income; expenses were flat QoQ and the cost-income ratio improved to 30.6%.

• A 50% Q2 profit distribution was approved through cash dividends and share buybacks.

Financial highlights

• Q2 total income was NIS 6.603bn, up 2.5% YoY; net financing profit was NIS 5.434bn, up 2.7%, and fees were NIS 1.145bn.

• Q2 profit before tax was NIS 4.286bn, up 6.4% YoY; tax provision was NIS 1.812bn and net profit was NIS 2.488bn.

• Regular financing income rose 13.7% QoQ, including NIS 431m from CPI; excluding CPI, it increased 3.4%. Lower rates were a headwind.

• Non-regular financing income was NIS 325m, mainly from nostro share investments and Poalim Equity; financial margin rose to 2.70% from 2.49%, largely due to CPI.

• Operating and other expenses were NIS 2.019bn, flat QoQ and down 4.4% YoY; H1 expenses fell 1.6% to NIS 4.037bn.

Outlook and guidance

• 2026 targets: net profit NIS 8.5–9.5bn, ROE 13%–14%, credit growth 8%–9%, and profit distribution 50%–60%.

• 2027 targets: net profit NIS 9.5–10.5bn and ROE 14%–15%; property sales are expected to generate NIS 800–900m pre-tax from 2027 onward.

• The estimated special-payment impact is NIS 950m on 2026 profit and 1.3–1.4 percentage points on ROE; the estimated 2027 payment is NIS 40m.

• Target assumptions include GDP growth of 4.3% in 2026 and 3.6% in 2027, year-end policy rates of 3.25% and 3.00%, and inflation of 1.5% and 2.0%.

• Further provision releases depend on economic and geopolitical conditions; timing is uncertain. FY 2026 NIM depends on CPI, rates and competitive pressures.