Bank Hapoalim Announces 2026 Second Quarter Results

 - Net profit in the second quarter totaled NIS 2,488 million; return on equity 15.0%.
 - Net profit in the first half totaled NIS 4,612 million; return on equity 14.0%.
     - The impact of the special tax on banks is 1.3%–1.4% annually, in ROE terms. Accordingly, 2Q26 and 1H26 ROE excluding the tax impact is approximately 16.4% and 15.4%, respectively.
 - Total income increased 19.8% vs. previous quarter, driven by 23.8% growth in financing income.
 - Total expenses stayed flat QoQ; the cost-income ratio was 30.6% in the quarter and 33.3% in the six-month period.
 - Credit growth was strong and diversified across all segments of operation, at 14.3% YoY and 3.3% QoQ.
 - Credit quality metrics remained strong: the NPL ratio was 0.50% and the NPL coverage ratio was 284%.
 - The CET-1 capital ratio stood at 11.83%, vs. the 10.23% minimum regulatory requirement and 11.0% minimum internal target.
 - The board of directors declared distribution at an overall rate of 50% of net profit, of which a cash dividend of NIS 995 million (NIS 0.76 per share) and the rest through the exercise of the fourth tranche of the share buyback plan (NIS 249 million).

TEL AVIV, Israel, Aug. 11, 2026 /PRNewswire/ -- Bank Hapoalim (TASE: POLI) today announced its financial results for the second quarter of 2026. Yadin Antebi, CEO: "Bank Hapoalim continued to demonstrate significant growth and strong profitability in the second quarter, achieving 15% ROE and net profit of NIS 2.5 billion, while maintaining the high quality of our credit portfolio".            

Income statement

• Net profit for 2Q26 totaled NIS 2,488 million, compared with NIS 2,124 million in the previous quarter and NIS 2,542 million in the same quarter last year. The main driver of the increase in net profit versus the first quarter is an increase in total income, which was driven by increases of 23.8% in financing income and 2.7% in fees, while total expenses stayed flat.
• Return on equity for 2Q26 stood at 15.0%, vs. 13.0% in 1Q26 and 16.7% in 2Q25.
  • Return on equity in the first two quarters of 2026 excluding the special bank tax impact was approximately 16.4% and 14.4%, respectively.
• Income from regular financing activity in the second quarter totaled NIS 5,109 million, an increase of 13.7% vs. 1Q26. The main impact on the increase was a higher contribution of the CPI (NIS 431 million in 2Q26 vs. NIS -33 million in 1Q26) and growth in activity, including lending, deposits, and dealing rooms. On the other hand, a lower average interest rate during the quarter (by 11 basis points) had a negative impact. Excluding the effect of the CPI, income from regular financing activity grew by 3.4%. Substantial growth was also recorded in the non-regular financing activity line, due to higher income from equity investments (NIS 213 million in 2Q26) and other items.
• The financial margin from regular financing activity increased to 2.70% in the second quarter (vs. 2.49% in 1Q26), mainly due to the impact of the CPI, while being adversely affected by the aforementioned rate cut and lower credit margins. The financial margin has been reclassified to reflect the reclassification of credit and deposit balances related to bond lending and borrowing activities between customers, from interest-bearing to non-interest-bearing balances.
• Fee income totaled NIS 1,145 million in 2Q26, a 2.7% increase compared to 1Q26, mostly derived from an increase in fees from credit cards, securities, and conversion differences. Compared with the corresponding quarter last year, fees stayed fairly flat, as in the second quarter of 2025 the bank recorded special income received from the international credit-card organizations.
• Operating and other expenses stayed unchanged compared to the previous quarter and decreased by 4.4% vs. the corresponding quarter. The flattish expenses, coupled with the aforementioned growth in total income, brought the cost-income ratio to 30.6%, compared to 36.6% in the preceding quarter and 32.8% in the corresponding quarter last year. The cost-income ratio in the first half of 2026 was 33.3%, vs. 33.8% in the comparable period.
• Provision for credit losses in the second quarter of 2026 amounted to NIS 298 million (a credit-loss ratio of 0.22%). The provision for credit losses in the quarter reflects the growth in the credit portfolio, as well as the persisting uncertainty in the economic environment. There were no exceptional recoveries in the individual provision during the quarter.
• Profit before tax in the second quarter of 2026 was NIS 4.3 billion, a 6.4% increase vs. the corresponding quarter. The year-over-year increase in profit before tax reflects the strengthening of the bank's underlying business performance, despite an approximately 60-basis-point average decline in interest rates and lower contribution of the CPI. The improvement was supported by strong business growth and disciplined cost management.
  Profit after tax, however, was negatively impacted by the increase in the special tax imposed on banks. The total special tax imposed on the banking system increased from NIS 1.3 billion in 2025 to approximately NIS 3.0 billion in 2026, significantly increasing the bank's tax expense.

Balance sheet

• Net credit to the public in the second quarter of 2026 totaled NIS 536.2 billion, compared with NIS 519.3 billion at the end of the preceding quarter and NIS 469.1 billion at the end of the second quarter of 2025, an increase of 3.3% and 14.3%, respectively.
  Corporate credit increased by 4.8% in comparison to the previous quarter and by 23.9% vs. 2Q25; commercial credit increased by 4.8% QoQ and 15.4% YoY. In the retail banking division, the housing loan portfolio grew by 2.0% QoQ and by 6.5% YoY, small business credit increased by 1.5% and 10.1%, and consumer credit grew by 3.8% and 8.4%, respectively. The main growth in the business segments in the second quarter was recorded in the financial services, real estate, information and communication, and transportation and storage economic sectors. Credit balances also include unsecured securities lending and cash collateral given in respect of transactions in derivatives, as detailed in table 2-12 in the 2Q26 financial report.
• Total deposits reached NIS 618.1 billion, an increase of 2.5% vs. last quarter and 7.1% compared to the same quarter last year. Retail deposits decreased by 0.3% and 1.1% respectively, to NIS 318.5 billion, impacted by customer preferences to move funds to capital-market products, but still represent 52% of total deposits.
• LCR and NSFR are at 126% and 114% respectively, vs. the minimum regulatory requirements of 100%.
• The allowance for credit losses stood at NIS 9.0 billion as at June 30, 2026, of which NIS 8.7 billion attributed to the collective allowance. The total allowance constitutes 1.65% of total credit.
• Credit quality indicators continue to be strong; the NPL ratio stood at 0.50% and the NPL coverage ratio (balance sheet allowance for credit losses/NPL) was 284%.
• Shareholders' equity grew by 8.1% in the last year, to NIS 67.1 billion, due to the bank's strong organic capital generation. The CET-1 capital ratio as at June 30, 2026, stood at 11.83%, vs. the 10.23% minimum regulatory requirement and 11.0% minimum internal target. The total capital ratio as at June 30, 2026, stood at 14.81%, vs. a 13.5% minimum regulatory requirement.
• Profit distribution: The board of directors approved a total distribution of 50% of net profit, in the amount of NIS 1.2 billion: NIS 995 million in cash dividend (NIS 0.76 per share), and the rest through share buybacks in the amount of NIS 249 million. The cash dividend is to be paid on August 27, 2026.

Financial targets

Financial targets for 2026–2027, based on baseline assumptions as of March 5, 2026, and following the completion on March 30, 2026, of the legislation regarding a special bank tax in 2026 and 2027:

• Net profit in the range of NIS 8.5–9.5 billion for 2026 and NIS 9.5–10.5 billion for 2027;
• Return on equity in the range of 13%–14% for 2026 and 14%–15% for 2027;
• Growth of the credit portfolio at an average annual rate of 8%–9%;
• Profit distribution at a rate of 50–60% of net profit, through cash dividends or buybacks, subject to the guidelines of the Bank of Israel.

Recent developments

• Real estate asset sale:
  In 2021, the bank acquired land in Tel Aviv and started building its future headquarters, the Poalim Center. The bank plans to relocate all of its head-office units, currently scattered over eight buildings in Tel Aviv, into the new headquarters. The centralization of the units in one building is expected to contribute significantly to enhancing work interfaces and synergies among the units. The relocation, planned to begin in late 2027, will allow properties currently in use to be vacated and eventually sold; accordingly, the bank is promoting property betterment and addition of rights at the main head-office buildings.
  The bank launched a bidding process for the sale of Rubinstein Towers, comprising 22,000 square meters of office space in Tel Aviv.
  The financial targets for 2027 include the sale of several properties currently owned by the bank. The initial assumption is that the pre-tax profit from the sales will be in the range of NIS 800–900 million, to be recognized from 2027 onward.

Conference-call/webinar information

The call will take place at 5:00 p.m. Israel time / 3:00 p.m. UK time / 10:00 a.m. Eastern time.

Participation in the call/webinar is available via the following link: BankHapoalimQ2.2026 (pre-registration is also available via the link).

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