Bank Hapoalim Announces First Quarter 2026 Results

• Net profit in the quarter totaled NIS 2,124 million, with ROE of 13.0%. The results include the impact of a special banks tax, which reduced ROE by approximately 130–140 basis points, on an annual basis. Excluding this effect, ROE exceeded 14%.
• Credit growth remained strong and well diversified, increasing by 3.3% in the quarter and 14.0% year-over-year, well above the Bank's target range. At the same time, credit quality metrics continued to improve, with the NPL ratio declining to 0.44% and a high coverage ratio of 330%. Credit loss expenses were low, at 0.03%, supported by improved risk indicators and recoveries.
• The Board of Directors declared a distribution of 50% of net profit, including a cash dividend of NIS 850 million, NIS 0.65 per share, and the remainder (NIS 212 million) through share buybacks, in line with the Bank's payout target.
• Income from regular financing activity increased by 2% quarter-over-quarter, supported by business growth and a less negative CPI impact. This was partly offset by two rate cuts since November, reducing the average rate by approximately 40 basis points versus Q4. Non-regular financing activity recorded a small loss. The reduction versus the previous quarter is mainly due to mark-to-market of shares and fair value adjustments on derivatives.
• The financial margin remains a relative strength, rising slightly to 2.44%. While impacted by lower rates, the CPI effect was more moderate this quarter.
• Fee income continued its steady upward trend, rising by 0.5% quarter-over-quarter and 5.3% year-over-year, driven by higher activity in securities and credit-related services.
• The Bank maintained strong cost discipline, with total expenses declining by 10.3% compared to the prior quarter. Excluding a one-off expense recorded in Q4 2025, expenses declined by 1.6%. The cost-income ratio stood at 36.6%.
• On the balance sheet, net credit to the public reached NIS 519 billion, while deposits totaled NIS 603 billion. Capital and liquidity ratios remain strong, with a CET-1 ratio of 11.71%, well above the 10.23% minimum regulatory requirement and 11.0% minimum internal target. LCR stood at 128%.
• The allowance for credit losses stood at NIS 8.9 billion as at March 31, 2026, of which NIS 8.6 billion attributed to the collective allowance. The total allowance constitutes 1.68% of total credit.
• The Bank continues to benefit from the resilience of Israel's economy and remains well positioned for continued growth across its core business segments.
• The full report is available at the following link: https://www.bankhapoalim.com/en/investor-relations/financial-information/reports

Contact info:
Tamar Koblenz 
Head of Investor Relations 
Investor.Relations@poalim.co.il 

Dr. Sharona Mazalian-Levi
Spokesperson
sml@poalim.co.il 

This press release contains forward-looking statements, as defined in the Israeli Securities Law, relating to future events or future performance.

This press release is provided for convenience purposes only and does not constitute a substitute for a full review of the Bank's latest periodic/quarterly reports, as filed with the Israel Securities Authority.

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SOURCE Bank Hapoalim