Bank Hapoalim (POLI) Q3 2024 earnings summary

Executive summary

• Q3 net profit was NIS 1,905m, up 14.1% YoY; quarterly ROE was 13.6%. 9M net profit was NIS 6,081m, up 8.6%, with ROE of 14.9%.

• Double-digit ROE continued for an 11th consecutive quarter; strong organic capital generation supported a 40% quarterly profit distribution.

• Credit grew 3.4% QoQ and 6.4% YoY; NPL ratio improved to 0.71% amid ongoing war-related collective reserve building.

Financial highlights

• Q3 total income was NIS 5,627m versus NIS 5,298m in Q3 2023; net financing profit was NIS 4,619m and net interest income was NIS 4,577m.

• Regular financing income rose 3.1% QoQ to NIS 4,707m; CPI contributed NIS 556m, versus NIS 239m in Q3 2023.

• Q3 credit-loss provision was NIS 406m, down 38.7% YoY; 9M provision was NIS 343m versus NIS 1,426m.

• Operating and other expenses were NIS 2,062m, up 0.1% YoY; cost-income ratio was 36.6% versus 38.9%.

• Q3 non-regular financing included a NIS 301m bond-realization loss; total bond-sale losses were reported as NIS 300m, partly offset by higher CPI and business growth.

Outlook and guidance

• Q4 credit demand was expected to exceed H1 levels, but Q3 growth may not repeat and outcomes depend on geopolitical conditions.

• If conditions do not change materially, provisions were not expected to increase materially; deterioration could prompt additions, while improvement could enable gradual releases.

• Further bond sales depend on market prices and yield-curve opportunities, with the aim of extending maturities and supporting future financing income.

• Poalim 2026 strategy targets responsible core-banking growth, stronger customer service and innovation; adjustments were being assessed amid banking-market changes.