Israel's Bank Hapoalim profit falls on COVID-19 provision
The bank’s net provision for credit losses totalled 1.13 billion shekels in the quarter compared with 319 million a year ago.
By REUTERSA man enters the main branch of Bank Hapoalim, Israel's biggest bank, in Tel Aviv, Israel July 18, 2016.(photo credit: AMIR COHEN/REUTERS)Bank Hapoalim, Israel’s largest lender, said on Thursday net profit fell sharply in the second quarter as it set aside a large provision to deal with the COVID-19 crisis.The bank reported net profit of 133 million shekels ($39 million) compared with 871 million a year earlier and a forecast of 566 million according to Refinitiv I/B/E/S.Net interest income fell to 2.17 billion shekels in the quarter from 2.47 billion.The bank’s net provision for credit losses totalled 1.13 billion shekels in the quarter compared with 319 million a year ago. The credit loss provision included 806 million shekels as an advance measure to cope with the effects of the COVID-19 crisis.Barclays analyst Tavy Rosner said Israeli banks had entered the current crisis in good shape thanks to years of conservative lending practices.“While we are likely to see increased provisions in the near term, we see the banks as capable of weathering current challenges,” Rosner said.He estimated Hapoalim’s capital balance stands at 5.9 billion shekels, which would allow the bank to grow loans while potentially facing additional provisions.Shares in Hapoalim were down 1.6% in early trade in Tel Aviv.In April, the bank agreed to pay nearly $875 million to the US government to resolve charges it conspired with American taxpayers and others to hide over $7.6 billion in Swiss and Israeli accounts.
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