Bank Hapoalim Achieves Strong Financial Performance in Q1 2026

Bank Hapoalim's Q1 2026 Financial Results

Bank Hapoalim, one of Israel's leading financial institutions, has recently unveiled its financial performance for the first quarter of 2026. The results are quite impactful, demonstrating robust profitability, solid credit growth, and enhanced asset quality, highlighting the bank's resilience even during challenging times.

Yadin Antebi, the Chief Executive Officer of Bank Hapoalim, commented on the resilience of the Israeli economy, noting that the country's stability has facilitated the bank's strong growth. He emphasized that, despite the ongoing challenges posed by geopolitical issues, the bank has continued to thrive, focusing on expanding its market presence and supporting Israel's economic trajectory.

In terms of financial specifics, the bank reported a net profit of NIS 2,124 million, representing a return on equity (ROE) of 13.0%. This performance was, however, slightly impacted by a special banks tax that reduced the ROE by approximately 130-140 basis points on an annualized basis. If adjusted, the ROE would have exceeded 14%. This indicates that the bank's core operations remain strong despite external pressures.

Credit growth is another standout aspect of Bank Hapoalim's financial health, recording an impressive increase of 3.3% for the quarter and a remarkable 14.0% year-over-year. This growth is not only substantial but also diversified, indicating a well-balanced credit portfolio. The quality of these loans has also improved significantly, with the non-performing loans (NPL) ratio dropping to 0.44% and a coverage ratio of 330%, illustrating rigorous risk management and recoveries.

In a show of confidence, Bank Hapoalim's Board of Directors has declared a distribution of 50% of net profit, which includes a substantial cash dividend of NIS 850 million (NIS 0.65 per share) alongside a share buyback plan worth NIS 212 million. This distribution aligns with the bank's commitment to returning value to its shareholders while maintaining a strong capital position.

Looking at the bank's financing activities, income from regular financing rose by 2% from the previous quarter, bolstered by business growth and relatively less negative effects from inflation. However, it faced some pressure from two recent interest rate cuts, which effectively reduced the average rate by about 40 basis points compared to the fourth quarter of 2025. Meanwhile, non-regular financing activities experienced a small loss, primarily due to market fluctuations affecting share valuations and derivative adjustments.

The financial margin, a critical metric for banks, showed slight improvement, rising to 2.44%, despite the lower interest rates impacting the overall margins. Moreover, fee income has also been on a growth trend, increasing by 0.5% quarter-over-quarter and showcasing a 5.3% year-over-year increase, driven mainly by more engagement in securities and credit-related services.

Cost management has been an area of focus, with total expenses dropping by 10.3% from the last quarter. When adjusted for a one-time expense reported in Q4 2025, expenses only fell by 1.6%, indicating effective cost control measures are in place. The cost-income ratio remains favorable at 36.6%, demonstrating the bank's efficiency.

On the balance sheet side, net credit to the public reached a staggering NIS 519 billion, and total deposits have amounted to NIS 603 billion. The bank’s capital and liquidity ratios remain strong, showcasing a CET-1 ratio of 11.71%, well above the minimum regulatory requirement. The Liquidity Coverage Ratio (LCR) stands at an impressive 128%.

At the end of March 2026, the allowance for credit losses was recorded at NIS 8.9 billion, with NIS 8.6 billion attributed to collective allowances, representing 1.68% of total credit. This further indicates a proactive approach in mitigating potential credit risks associated with market volatility.

In conclusion, Bank Hapoalim appears to be well-positioned for sustained growth, leveraging the resilience of Israel's economy while fostering robust core business operations to navigate future challenges effectively. The bank's report not only showcases its financial health but also its strategic intent to maintain a leadership role in supporting Israel's economic growth.