Bank Hapoalim (POLI) Q4 2022 earnings summary

Executive summary

• FY2022 net profit reached NIS 6.532bn and ROE was 14.8%; total income rose 24.5% to NIS 17.920bn.

• Positive jaws lifted the FY2022 cost-income ratio to 44.5%, with a 39.1% ratio in Q4.

• Responsible credit growth and the Poalim 2026 strategy focused on core banking, customer service and productivity.

Financial highlights

• Total net financing profit rose to NIS 14.048bn from NIS 10.848bn; fees and other income reached NIS 3.872bn, versus NIS 3.544bn in 2021.

• Operating and other expenses were NIS 7.972bn, up 2.2% YoY; total income grew 24.5%, generating substantial positive jaws.

• Q4 total income rose 10.1% YoY; regular financing income excluding CPI increased 16% YoY and 7.9% QoQ.

• FY2022 credit losses were nearly zero: a ILS 579m collective provision was offset by more than ILS 600m in individual-credit recoveries.

Outlook and guidance

• Poalim 2026 prioritizes responsible growth, customer service, core-banking leadership, resource optimization and productivity.

• FY2023 costs were targeted to remain relatively flat or rise below inflation; delivery depended in part on union negotiations.

• Management aimed to maintain double-digit ROE, expected further RWA optimization, and viewed credit margins as near the end of expansion.

• Israeli GDP growth was forecast at 2.5% for 2023, with softer growth but no recession projected.

• Swiss subsidiary closure was planned for 2023, subject to the regulatory process.