Bank Hapoalim (POLI) Q3 2023 earnings summary

Executive summary

• Q3 net profit was NIS 1.669bn, with ROE of 13.4% and a 38.9% cost-income ratio; 9M net profit rose 17.1% YoY to NIS 5.599bn.

• Q3 profitability declined QoQ as financing profit fell and credit-loss provisions rose; the collective allowance incorporated estimated war impacts.

• Credit grew 1.1% QoQ to NIS 404.4bn; capital, liquidity and credit-loss buffers supported resilience amid wartime uncertainty.

Financial highlights

• Total income was NIS 5.298bn, versus NIS 5.725bn in Q2 and NIS 4.753bn in Q3 2022; 9M revenue rose 29.1% YoY to NIS 16.382bn.

• Q3 net financing profit was NIS 4.209bn, up 12.2% YoY; net interest income was NIS 4.006bn, up 10.2% YoY.

• Q3 provision for credit losses was NIS 662m, versus NIS 45m in Q3 2022; the 9M provision was NIS 1.426bn, versus NIS 464m of provision income in 9M 2022.

• Q3 net profit was NIS 1.669bn, versus NIS 1.922bn in Q2 and NIS 1.785bn in Q3 2022; 9M profit before tax rose 19.3% YoY to NIS 8.622bn.

Outlook and guidance

• Customer relief measures could cost up to NIS 420m with full utilization; most costs were expected in Q4 2023, depending on uptake.

• Economic recovery is expected after the war, but management cautioned against assuming a post-COVID-style rebound; war duration and economic effects remain uncertain.

• Poalim 2026 strategic priorities remain in effect, with planning assumptions to be reviewed as the war develops.