Bank Hapoalim Bm · TASE:POLI
Bank Hapoalim Bm — Q2 2020 Earnings Presentation
19 slides from Bank Hapoalim Bm's earnings presentation, Aug 19, 2020
Slide 1: Quarterly Financial Review
@ bank hapoalim Quarterly Financial Review
Slide 2: Disclaimer
Disclaimer This presentation includes condensed information and selected data regarding Bank Hapoalim’s Second Quarter 2020 results. This presentation does not substitute the Bank’s Second Quarter 2020 Financial Statements which include the full financial information including Forward-Looking Inform
Slide 3: Israel and COVID-19: A 'new normal'
Post peak, decline in unemployment Including furloughs 26.6% 20.4% | 12.2% 11.8% 12.3% Asthalf May20 2ndhalfmay20 tsthalfJune 20 2nd half June 20 1st half July 20 Source: Central Bureau of Statistics Mortgage market continues to track strong NIS millions, monthly average of executions 8,000 7,000 6,
Slide 4: Key profit and loss items
Key profit and loss items Total Net Financing Profit 2,632 2,498 2,359 Fees and Other Income 833 885 795 Includes NIS806 Total Income 3,465 3,383 3,154 | collective provision Provision for Credit Losses (319) (809) (1,128) Operating and Other Expenses (1,992) (1,916) (1,826) Profit before Taxes 1,15
Slide 5: Balance sheet: Demonstrating resilience (capital and reserves)
» | Balance sheet Demonstrating resilience Robust capital CET1 11.21% 1Q20 11.23% 2Q20 > 9.26% Min. regulatory requirement 7.0% Leverage ratio — a = Reserve build Collective allowance ratio* 1.50% 1.24% 1.14% 1.13% 1.13% 2Q19 3aQ19 4a 1Q20 2Q20 * Collective allowance with respect to credit to the pu
Slide 6: Balance sheet: Strong liquidity & responsible credit growth
Balance sheet Demonstrating resilience Strong liquidity & funding Responsible credit growth “73% LDR Housing Gov't 401 loans guarantee fund 294 NIS LCR billion —_—_—_— rey 9X - 66% 121% —y 131% +5.1% ns 368 Retail FY19 2020 1H20 Net credit to the Deposits om public the public @ bank hapoalim
Slide 7: Efficiency
Efficiency - o 7900 c/l ratio fen employees oo 9 iia ~10% of work force 59.1% 578% 581% poe Fifth efficiency plan 5 —o_8 8% to be expedited 2017 2018 2019 1H20 * Excluding special items Management priorities remain Efficiency & digital Multi-channel service f—4 %_ Digital and self pe >80 ° service b
Slide 8: Credit losses
» | Credit losses NIS million Allowance for credit losses 4,334 2018 5,251 2019 5,873 1Q20 Provision for credit losses 6,760 1,276 809 613 2Q20 2018 2019 1Q20 * Total provision for credit losses includes collective and individual provision. 806 2Q20 Total” Adverse effects of COVID-19 on collective p
Slide 9: NPL levels and problematic debt
NIS million NPL levels 2.26% NPL 7% 0.76% 5,845 4,928 i 3,480 3,867 3,570 r 073 i 178 2014-2015 2016) 2017-—S - 2018 ~=— 2019S 2Q20 > | NPL levels and problematic debt Problematic debt 14,656 2014 2015 2016 2017 2018 @ Impaired @ Substandard @ Special supervision 8,513 Net 10,886 10,992 2019 ~=2Q20
Slide 10: Lending relief program
Lending relief program Payment deferrals granted* * Deferral of loan payments supporting customer demand for cash flow relief * Most applications received at the onset of the pandemic * Current balance of credit still in deferral is significantly lower than the cumulative amount 15-22 22-29 29Mar- 5
Slide 11: Highly diversified loan book
Highly diversified loan book A strong asset in the ‘new normal’ Credit portfolio — Credit portfolio ws 294." billion 13% Consumer 1.8%A | A% 289 291 ~«-293-«« 300 294 International . Credit so portfolio a loans 26% Corporate 14% Commercial 2019 319 «4Q19 1020 2Q20 @ bank hapoalim
Slide 12: Credit growth
» | Credit growth In Israel, NIS billion Commercial Corporate 401 40.9 ng Pl 73.9 65.5 | 37.5 = OF |e 79? & 2017 2018 2019 2Q20 2017 2018 2019 2Q20 Housing loans Small business Consumer 893 93.9 32.4 32.6 31.0 _ woe 45.9 441 ed 2017 2018 2019 2Q20 2017 2018 2019 2Q20 2017 2018 2019 2Q20 @ bank hapoa
Slide 13: Deposit base
Deposit base &s) — Deposit base NIS billion . 5 li=a 401 Largest retail a deposit base taal “ A% Retail deposits —___ in the sector “a International . activity A key funding tay BSA source % Corporate 260-263 232 231 235 9% 9g 66% Financial management Retail 7% Commercial 2019 =3Q19 ~4Q19 1Q20 2Q20
Slide 14: Financing income and margin
Financing income and margin 2.39% 5 5 » _ 2.23% 2.28% ee 250% 2.30% 1.83% 1.40% 0.25% 0.25% 0.25% 0.25% 0.25% 2,632 2,341 2,539 2,498 60 138 12 (46) 2,572 2,387 2,401 2,486 2Q19 3Q19 4Q19 1Q20 2Q20 Financial margin from regular activity FED interest rate average, upper bound Bank of Israel interest
Slide 15: Total expenses in 2Q20 exclude income of NIS 53 million of exchange rate differentials
Total expenses in 2Q20 exclude income of NIS 53 million of exchange rate differentials associated with provision made with respect to the investigation of the Bank Group’s business with American clients. Total expenses in 1Q20 exclude expense of NIS 97 million of exchange rate differentials associat
Slide 16: Capital base
« | Capital base NIS billion 38.0 38.8 38.3 CET1 capital CET 1 capital ratio — Total capital ratio 14.2” — Leverage ratio 47.0% 9.5% Internal capital target 9.26% Min. regulatory requirement 2014 2015 2016 2017 2018 2019 2Q20 @ bank hapoalim
Slide 17: Appendix
@ bank hapoalim Appendix
Slide 18: Key balance sheet items
Key balance sheet items 2019 2Q20 Cash on hand and deposits with banks 88,122 113,033 Securities 59,486 66,513 Net credit to the public 292,940 293,700 Deposits from the public 361,645 400,816 Deposits from banks 3,520 3,418 Bonds and subordinated notes 26,853 25,196 Shareholders’ equity 38,181 38,0
Slide 19: Israel's leading financial institution
@ bank hapoalim Israel's leading financial institution