Bank Hapoalim BM (BKHPF) Q1 2026 Earnings Call Highlights: Strong Profit Growth and Strategic ...

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• Net Profit:ILS2.1 billion, a 2.2% increase quarter-on-quarter.

• Return on Equity (ROE):13%, excluding special tax impact above 14%.

• Credit Growth:3.3% in the quarter, 14% over the last 12 months.

• Non-Performing Loan (NPL) Ratio:0.44%.

• EPS:ILS1.62.

• Financing Income Growth:2% quarter-on-quarter.

• Fee Income Growth:0.5% in the quarter, 5.3% over the last 12 months.

• Expenses:Down 10.3% quarter-on-quarter; excluding provision, down 1.6%.

• Cost-to-Income Ratio:36.6%.

• Provision for Credit Losses:ILS35 million, 0.03% ratio.

• Deposit Growth:1.7% in the quarter, 6.5% over the last 12 months.

• CET1 Capital Ratio:11.71%.

• Dividend Distribution:50% of net profit, ILS850 million in cash dividend, ILS0.65 per share.

• Net Profit Target for 2026:ILS8.5 billion to ILS9.5 billion.

• Loan Growth Target:8% to 9% for 2026 and 2027.

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Release Date: May 14, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Bank Hapoalim BM ( BKHPF ) reported a strong start to 2026 with a net profit of ILS2.1 billion and a return on equity of 13%.

• The bank achieved impressive credit portfolio growth of 14% over the last 12 months, with a 3.3% increase since the beginning of the year.

• The non-performing loan (NPL) ratio continued to drop, now standing at 0.44%, indicating improved portfolio quality.

• Bank Hapoalim BM ( BKHPF ) maintained a high capital ratio comfortably above the minimum requirements, with a CET1 capital ratio of 11.71%.

• The bank distributed 50% of net profit as dividends, aligning with its target and demonstrating a strong commitment to shareholder returns.

Negative Points

• The special tax payments applied to Israeli banks in 2026 are expected to impact Bank Hapoalim BM ( BKHPF ) by ILS950 million, affecting the return on equity.

• Nonregular financing activity recorded a small loss due to market volatility, impacting the bank's overall financial performance.

• The bank's CET1 ratio decreased slightly from almost 12% to 11.71% quarter-on-quarter, reflecting the impact of strong growth in risk-weighted assets.

• Despite a strong performance, the bank's expenses were down only moderately by 1.6% when excluding a previous provision, indicating potential challenges in cost management.

• The geopolitical situation, including the confrontation with Iran, led to a significant contraction in GDP during the first quarter, posing macroeconomic challenges.