Bank Hapoalim Bm · TASE:POLI
Bank Hapoalim Bm — Q3 2020 Earnings Presentation
21 slides from Bank Hapoalim Bm's earnings presentation, Nov 25, 2020
Slide 1: 3Q20 Quarterly Financial Review
3Q20 Quarterly We Financial Review WS @ bank hapoalim
Slide 2: Disclaimer
Disclaimer This presentation includes condensed information and selected data regarding Bank Hapoalim’s Third Quarter 2020 results. This presentation does not substitute the Bank's Third Quarter 2020 Financial Statements which include the full financial information including Forward- Looking Informa
Slide 3: Strong fundamentals support a fortress position
Strong fundaments support a fortress position Solid profit in @3 despite challenging macro environment Following high reserve build in 1H20 Q3 provision materially lower Strong capital generation high surplus vs. targets Robust liquidity position supported by large retail deposit base Astute credit
Slide 4: Israel USA Spain UK Italy
800 Israel USA Spain UK Italy 600 400 200 0
Slide 5: Israel and COVID-19
> | Israel and COVID-19 NIS millions, monthly average of executions Mortgage market continues to track strong 6.956 6510 5,306 4705 497 «4,925 5,31 4099 5,568 5734 5,300 | 10/18 2Q/18 3Q/18 4Q/18_ 10/19 2Q/19--3Q/19_ 4Q/19_ 10/20 2/20 3Q/20 Source: Bank of Israel Expansionary monitory policy pushed
Slide 6: Resilient operating performance
Resilient operating performance 3Q19 2Q20 3Q20 Total Net Financing Profit 2,341 2,359 2,536 Fees and Other Income 826 795 766 Total Income 3,167 3,154 3,302 Provision for Credit Losses 40 (1,128) (193) Operating and Other Expenses (1,970) (1,826) (1,851) Profit before Taxes 1,237 200 1,258 Provision
Slide 7: Fortress balance sheet
» | Fortress balance sheet Robust capital CET1 6.9% _ Leverage ratio 'O, 11.23% 11.53% Above revised reg. target of 5.5% a —— “> 9.26% Min. regulatory requirement 2020 3020 Reserve build Collective allowance ratio* 1.14% 1.13% 1.13% 2Q19 3aQ19 4Q19 1Q20 2Q20 3Q20 * Collective allowance with respect
Slide 8: Fortress balance sheet
Fortress balance sheet Strong liquidity & funding “70% LbR a7 bilion 293 vilfon LCR 6% 121% —> 13.2% Retall pvag 3020 Net credit to the Deposits from public the public Well diversified credit portfolio Consumer 13% 11% Small business International 4% Credit portfolio 33% Housing loans Corporate 25%
Slide 9: Evaluating actions to structurally reduce the cost base
Evaluating actions to structurally reduce the cost base C/l ratio” ty Expediting fifth efficiency plan sem Streamlining of branch network 56.5% Uy Proposed consolidation of Bank’s CBD HQ Up Cost reduction task force, sustaining continued investment in growth 2019 9M20 Excluding special items Continu
Slide 10: Robust reserve build allows lower provisions in Q3
« | Robust reserve build allows lower provisions in Q3 NIS million Allowance for credit losses Provision for credit losses go 6974 5,873 5,251 1276 1,128 4,334 613 809 489 Wapop rue Total” | collective provision 2018 2019 1Q20 2Q20 3Q20 2018 2019 1Q20 2Q20 3Q20 * Total provision for credit losses in
Slide 11: NPL levels continue to track at relatively low levels
NPL levels continue to track at relatively low levels NPL levels Problematic debt 2.26% NPL 14,656 8,951 8,184 4,928 3,480 3,867 3,482 2,073 2,178 2014 20152016) 2017-—S «2018 = 2019S 3Q20 2014 2015 2016 2017 2018 2019 3Q20 Limpaired [substandard |] special supervision @ bank hapoalim
Slide 12: Payment deferral debts note
refers to debts for which the payment deferral period has ended and debts in deferral at report date. data refers only to payments in deferral at the report date. Please refer to table 3-1 in the 3Q20 financial statement for full disclosure.
Slide 13: Highly diversified loan book
Highly diversified loan book Small business — Credit portfolio 13% 11% we 293°" billion Consumer 4% International 33% portfolio Housing loans 25% Corporate 14% Commercial 3Q19 4Q19 1Q20 2a20 3Q20 @ bank hapoalim
Slide 14: Highly diversified loan book
« | Highly diversified loan book In Israel, NIS billion Commercial Corporate oss n9 76.6 72.7 2017 2018 2019 3Q20 2017 2018 2019 3Q20 Housing loans Small business Consumer 96.4 324 32.6 310 30.7 459 444 “5 89.3 m1 SOs oH 7.9% he -0.9%9 2017 2018 2019 320 2017 2018 2019 3Q20 2017 2018 2019 3Q20 @ ban
Slide 15: Deposit base an important funding source
ro r+ 3Q19 Deposit base an important funding source — Deposit base 41 7 NIS billion Retail deposits 4Q19 18.3% & 1Q20 nl 263 273 2Q20 3Q20 Largest retail deposit base in the sector seeeeeeet 52% core Consumer 4% International activity 13% Corporate Deposit wh base ™% 65% Financial » management Retai
Slide 16: FED and local rate reduction affecting margins
FED and local rate reduction affecting margins 2.23% 2.23% 2.27% e - 2.30% 1.83% 1.40% 0.25% 0.25% 0.25% 2,341 2,539 2,498 (46) 138 12 2,387 2,401 2,486 3Q19 4Q19 1Q20 0.25% 0.12% 2,359 38 2,321 2Q20 N98 0.25% 0.10% 2,536 200 3Q20 Financial margin from regular activity FED interest rate average, upp
Slide 17: Total expenses in 2Q20 exclusion note
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.
Slide 18: Robust capital buffers
» | Robust capital buffers NIS billion 38.0 38.8 39.2 LJ CET1 capital 11.53% 36.6 CET 1 capital ratio — Total capital ratio 14.7” — Leverage ratio 4, 6.9% 9.5% Internal capital target 9.26% Min. regulatory requirement 2014 2015 2016 2017 2018 2019 3Q20 @ bank hapoalim
Slide 19: Appendix
@ bank hapoalim 3Q20 Appendix eo ee @ « eo © e@ @ ee e ee «
Slide 20: Key balance sheet items
Key balance sheet items 2019 3Q20 Cash on hand and deposits with banks 88,122 128,421 Securities 59,486 67,835 Net credit to the public 292,940 292,845 Deposits from the public 361,645 417,005 Deposits from banks 3,520 3,280 Bonds and subordinated notes 26,853 24,724 Shareholders’ equity 38,181 38,9
Slide 21: Israel's leading financial institution
WS @ bank hapoalim Israel's leading financial institution