Bank Hapoalim Delivers Strong Forecast: Annual Profit of NIS 8.5-9.5 Billion Over the Next Two Years

Bank Hapoalim posted excellent results for 2024, reporting a net profit of NIS 7,635 million, up from NIS 7,360 million in 2023. The increase was primarily driven by higher net interest income and lower credit loss expenses. However, net profit was significantly impacted by a recorded expense of approximately NIS 597 million (NIS 400 million after tax) related to an efficiency plan, along with a special tax imposed on banks. The return on equity (ROE) for 2024 stood at 13.8%, compared to 15.0% in 2023, with the decline partially attributed to the efficiency plan expenses.

In the fourth quarter, net profit came in at NIS 1,554 million, down from NIS 1,905 million in the previous quarter and NIS 1,761 million in the same quarter last year. The fourth-quarter ROE was 10.8%, compared to 13.6% in the prior quarter and 14.0% a year earlier. The decline in Q4 results was primarily due to the efficiency plan expenses—without them, the bank’s profit would have exceeded NIS 2 billion.

Credit Loss Expenses Decline Sharply

Bank Hapoalim recorded credit loss expenses of NIS 693 million in 2024, down significantly from NIS 1,879 million in 2023. Most of the expense was attributed to group-level credit loss provisions and an increase in automatic write-offs. While the bank continued to grow its group-level provisions in 2024, it did so at a more moderate pace, reflecting credit portfolio expansion amid ongoing uncertainty and improved macroeconomic adjustments.

Additionally, net income of approximately NIS 250 million was recorded from individual provisions, mainly due to recoveries from a small number of borrowers—compared to an expense of NIS 153 million in 2023.

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Impressive Outlook: Profit Expected to Reach NIS 8.5-9.5 Billion Per Year

The bank’s board of directors announced a total profit distribution of 40% of Q4 net income, amounting to approximately NIS 622 million. This includes a NIS 372 million cash dividend, with the remaining NIS 250 million allocated for another round of share buybacks.

But what matters most to investors is the outlook. Bank Hapoalim has set ambitious financial targets for 2025-2026, forecasting an annual net profit of NIS 8.5-9.5 billion, a return on equity of 14%-15%, and an average annual credit portfolio growth of around 7%. Additionally, the bank aims to distribute at least 50% of net profits as dividends.

Bank Hapoalim Chairman Noam Hangebi emphasized that the bank’s financial strength reflects disciplined management and the resilience of the Israeli economy. "Despite the challenges we faced this year, the bank delivered significant value to shareholders—both in balance sheet figures, which show impressive credit and deposit growth alongside a stronger capital base, and in profitability metrics, which highlight revenue growth and tight cost control."