JERUSALEM, March 7 (Reuters) - Hapoalim, one of Israel's two largest banks, reported a slight rise in quarterly profit helped by lower expenses and said it was well prepared to cope with the potential effects of Israel's war against Palestinian Islamist group Hamas.
Hapoalim said on Thursday it earned a net 1.76 billion shekels ($491.5 million) in the fourth quarter, up from 1.75 billion a year earlier.
Amid easing inflation, net interest income dipped to 3.75 billion shekels from 3.93 billion. Its credit loss provision increased to 453 million shekels from 430 million.
The war began on Oct. 7, at the outset of the fourth quarter.
For all of 2023, Hapoalim's profit rose to 7.36 billion shekels, from 6.53 billion in 2022.
"The events of October 7th found Bank Hapoalim highly prepared, in terms of its responsible growth, diversified
credit portfolio, and strong financial robustness parameters," said CEO Dov Kotler.
Hapoalim said it would pay a quarterly dividend of 352 million shekels, or 20% of net profit -- in line with the regulator's directive to hold back on large payouts during the war.
"The board of directors of the bank, in its decision, noted the ability of the bank to potentially declare a higher
dividend, in light of the bank's significant capital surpluses and robust financial position," said Hapoalim, the first of Israeli banks to report quarterly earnings.
Its Tier 1 capital ratio rose by 77 basis points in 2023 to 12.02%, above the 10.23% minimum regulatory requirement.
Hapoalim and its peers will have to pay as much as 2.5 billion shekels in extra taxes over the next two years as lawmakers look for new ways to boost state coffers heavily depleted by war expenses.
Banks will pay an additional 6% of the profit generated from their activities in Israel in 2024 and 2025 under a tax amendment approved by parliament's finance committee this week after the panel criticised banks for making huge profits as interest rates spiked that sharply boosted mortgages and other loans.
($1 = 3.5809 shekels)
Reporting by Steven Scheer; Editing by Kim Coghill
Source: Reuters