In line with the profit warning it recently issued, Bank Hapoalim (TASE: POLI) ended 2016 with a profit of NIS 2.62 billion, down from NIS 3.08 billion in 2015, mainly because of a fall in profit in the fourth quarter of 2016.
The bank announced last Thursday that it would make a provision of NIS 890 million in its fourth quarter financials (for the investigation in the US, credit losses, and an increase in tax expenses). Thus Hapoalim's profit fell to just NIS 138 million in the fourth quarter compared with NIS 586 million in the corresponding quarter of 2015 and NIS 699 million in the preceding quarter of 2016.
Net income from interest was NIS 8.19 billion in 2016, up from NIS 7.88 billion in 2015. Total revenue in 2016 was slightly higher at NIS 14.72 billion. Return on capital fell to 7.72% in 2016 from 9.61% in 2015 while capital adequacy rose to 15.11% in 2016 from 14.36% in 2015. The dividend distributed for profit in 2016 totalled NIS 609 million.
Other figures include NIS 271.95 billion credit to the public, down from NIS 278.49 billion at the end of 2015, while deposits from the public rose to NIS 338.5 billion at the end of 2016 from NIS 321.72 billion at the end of 2015.
CEO Arik Pinto's salary cost was NIS 6.25 million in 2016 of which NIS 2.28 million was his salary and NIS 3.2 million were other payments. Former CEO Zion Kenan earned NIS 4.59 million last year and former chairman Yair Seroussi earned NIS 3.96 million.
Chairman Oded Eran said, "In the year that I am serving as a Director in Bank Hapoalim, and in the past few months as Chairman of the Board, I discovered a strong bank, with loyal customers, professional and talented management and employees, who identify with their workplace and are devoted to it, and are aware of the challenges that await us in the future and the need to continually improve in every possible parameter."
"In the past year, the Bank began to implement the outline for the 2016-2018 strategic plan, which focuses the Bank on several main goals: the creation of agile, optimized infrastructures in areas such as capital management and human-capital development, and the crafting of innovative technological infrastructures as a platform for advanced services for retail and business clients; innovation in financial products and services; focused development of international operations; and continued operational excellence."
President and CEO Arik Pinto said, "The Bank's financial results prove that it is the leading financial institution in Israel. These are strong results, even after taking into account the additional provisions made with respect to the US investigation. Excluding the provisions regarding the investigation and the deferred tax, there was an increase in all the significant financial parameters compared with 2015. The Bank surpassed both the capital target required by the Bank of Israel and its own internal capital plan, while optimizing the use of capital."
Published by Globes [online], Israel business news - www.globes-online.com - on March 30, 2017
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