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Bank Hapoalim
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Bank Hapoalim Condensed Financial Statement as at March 31, 2010
Mr. Yair Seroussi, Chairman of the Board
Investor Presentation
TASE - Israel Opportunity Conference London
Bank Hapoalim
Condensed Financial Statement
as at March 31, 2010
July 2010
Bank Hapoalim B.M.
Head Office
50 Rothschild Blvd.
Tel Aviv 66883, Israel
Tel. 972 3 5673333
Fax. 972 3 5607028
www.bankhapoalim.com
TASE: POLI
LSE: BKHD
ADR: BKHYY
Safe Harbor Statement
This document has been prepared by Bank Hapoalim solely for use at the company’s presentation of first quarter
2010 results and a strategic update.
The information contained in this document has not been independently verified. No representation or warranty
express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or
correctness of the information or opinions contained herein. None of the company, or any of their employees or
representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from
any use of this document or its contents or otherwise arising in connection with this document.
This document is being supplied to you solely for your information and may not be reproduced, redistributed or
passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.
The distribution of this document may be restricted by law, and persons into whose possession this document
comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be
bound by the foregoing instructions.
Forward looking statements for the company’s business, financial condition and results of operations, are subject to
risks and uncertainties, that could cause actual results to differ materially from those contemplated. Such forward
looking statements, include but are not limited to, product demand, pricing, market acceptance, changing economic
conditions, risks in product and technology development and the effect of the company’s accounting policies.
As well as certain other risk factors which are detailed from time to time in the company’s filings with the securities
authorities.
TASE: POLI
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2
A Strong Investment Case for Israel
Israel: a vibrant and modern economy
• Impressive economic performance with GDP growth of above 4% per annum
• Among the first to show a turning point back to economic growth
•Strong external position and large FX reserves
• Public debt to GDP is under control and declining
•A strong and well-supervised banking system
•No need for any government bailouts or stimulus programs
TASE: POLI
LSE: BKHD
ADR: BKHYY
3
A Strong Investment Case for Bank Hapoalim
Bank Hapoalim: Israel’s leading bank
•About 1/3 of the banking sector
• Active in all areas of universal banking
• Dynamic management team
•Strong capital base: Capital Adequacy Ratio: 13.9% (Q1)
• Balancing low risk with stable return: ROE 9.2% (Q1)
TASE: POLI
LSE: BKHD
ADR: BKHYY
4
Bank Hapoalim has the Pre-Eminent
Banking Franchise in Israel…
Retail Customers
33%
Corporate Lending
21%
Commercial Loans
(SME’s)
Mortgages
Credit Cards
48%
Custody Services
38%
26%
45%
Foreign Institutional Investors
Market Share in Israel (2009)
TASE: POLI
LSE: BKHD
ADR: BKHYY
5
Bank Hapoalim - Overview
Israel’s Leading Financial Institution
• Ninety years of banking strength
• Dominant position, with over one third of the banking sector in Israel
• Among the most actively traded stocks on Tel Aviv Stock Exchange
• Branches, subsidiaries and representative offices in
North and Latin America, Europe, Turkey, Far East, Australia
Current Ownership Structure
06.01.2010
35%
16%
Financial Highlights
As at 31 March 2010 in USD
Total Assets Shareholder equity CAR Net Profit (1Q10) Branch Network ROE $80.8 billion
$5.7 billion
13.9%
$124 million
over 270
9.2%
TASE: POLI
Domestic
Financial
Institutions*
Foreign
Financial
Institutions*
Unavailable
data
23%
(individual
investors,
money managers,
hedge funds)
26%
Arison Holdings
(+Salt Industries)
* Based on public data
LSE: BKHD
ADR: BKHYY
6
Main Centers of International Activity
PAM
U.K subsidiary focused
on asset management
Bank Hapoalim London
Corporate and Private Banking
Bank Hapoalim Switzerland
Private Banking - Branches in Zurich,
Geneva, Luxembourg and Singapore
Bank Hapoalim NY
Corporate Banking and
syndications
Bank Pozitif (Turkey)
Retail and Corporate
Bank Hapoalim Israel
Israel’s leading bank
Banks and subsidiaries
Branches: New York, Miami, London, Zurich, Geneva, Luxembourg, Singapore, Colonia, Montevideo, Punta Del Este
Rep offices: Toronto, Montreal, Paris, Frankfurt, Budapest, Sydney, Mexico City, Santiago, Panama City, Buenos Aires, Caracas, Moscow, Hong Kong
TASE: POLI
LSE: BKHD
ADR: BKHYY
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Established Global Presence - Bank Hapoalim Group
PAM
Bank Hapoalim Switzerland
U.K subsidiary focused
on asset management
Bank Hapoalim NY
Corporate Banking and
syndications
Hapoalim Securities
Broker dealer
BHI Miami
Bank Hapoalim London
Corporate and Private Banking
Private Banking - Branches in Zurich,
Geneva, Luxembourg and Singapore
Bank Pozitiv (Kazakhstan)
BHI Jersey Ltd.
Retail and Corporate
Opened Sept. 2008
Bank Pozitif (Turkey)
Bank Hapoalim
Luxembourg
Retail and Corporate
Mainly syndication activity
Bank Hapoalim Israel
Private Banking focused
Israel’s leading bank
Uruguay
Private Banking focused
Banks and
subsidiaries
Branches: New York, Miami, London, Rep
Zurich, Geneva, offices:
Luxembourg, Singapore,
Colonia, Montevideo,
Punta Del Este
TASE: POLI
LSE: BKHD
Toronto, Montreal, Paris, Frankfurt, Budapest, Sydney,
Mexico City, Santiago, Panama City,
Buenos Aires, Caracas, Moscow,
Hong Kong
ADR: BKHYY
8
Multi Year Strategic Plan
approved by the Board on January 21, 2010
“Back to Basics”
• On track for projected trajectory of growing revenues and improving in profitability in 2010
• Balance risk and return considerations
• Maintain the bank’s level of capital adequacy, above the regulatory requirement
• Achieve long term ROE in the low to mid-teens
TASE: POLI
LSE: BKHD
ADR: BKHYY
9
Five main themes in the Bank’s Strategic Plan
for the next 3-5 years
Maximize value for stakeholders
Excess return on
risk-adjusted Capital
➥
➥
Growth of activity
‹
‹
Customer-focused
Leadership
in Israel
Operational
Excellence and
Efficiency
Increase savings
and investments
activity and
revenues from
non-credit
products
Create a
platform for
future growth
in International
Activity
Strengthen
Global Risk
and Capital
Management
capabilities
Cultivate and Manage Human Resources
Act in line with the Bank’s values and the principles of Sustainability
TASE: POLI
LSE: BKHD
ADR: BKHYY
10
A Strong Balance Sheet with Loyal Clientele
DEPOSITS - As of March 31st, 2010
CREDIT - As of March 31st, 2010
Retail accounts for 61% of Deposits
Corporate accounts for 45% of Loan Book
Financial Mngt
Households
3%
Corporate
23%
Households
13%
45%
SME 4%
Small
Business
8%
26%
Corporate
10%
48%
9%
Private Banking
10%
0%
Financial Mngt
Private
Banking
Small
Business
SME
Conservative Loan to Deposit Ratio 95.5%
TASE: POLI
LSE: BKHD
ADR: BKHYY
11
Net Profit and ROE - Quarterly NIS millions
8.3%
382
2
0.9%
42
425
8.8%
3
9.4%
467
462
9.2%
2
1
380
422
465
461
2Q09
3Q09
4Q09
1Q10
21
21
1Q09
■ ROE
■ Profit from extraordinary transactions
■ Net Operating Profit
TASE: POLI
LSE: BKHD
ADR: BKHYY
12
Committed to a Strong Capital Base
Shareholder’s Equity and Capital Adequacy Ratio NIS millions and %
20,598
18,233
18,778
18,795
13.67%
21,195
13.87%
16,237
Total
CAR
10.47%
10.53%
10.26%
10.92%
8.78%
8.52%
Tier I
6.92%
12/05
7.41%
12/06
As reported
TASE: POLI
7.50%
12/07
7.44%
12/08
■ According to Basel I
LSE: BKHD
12/09
03/10
■ According to Basel Il
ADR: BKHYY
13
Focused on Growth - Top Banking Franchise in a
Strong Israeli Economy
Continuous Income Generation:
• Increasing Net Interest Income:
• Improving Margins
• Quality asset base growing
• Growing Operating Income:
• Leadership position in key
fee-generating segments
• Growing transaction fees from capital market and credit cards
Reducing Costs:
•
•
Lower Provisions for doubtful debts
• Problematic Debt on the decline
Emphasis on Operational Efficiency:
• Lean Banking
• Centralized Back Office
• Robust use of direct channels
• Maintaining expenses
Growth in the Israeli economy will enhance the Bank’s results
TASE: POLI
LSE: BKHD
ADR: BKHYY
14
Key Takeaways
• Strong Israeli economy
• Bank Hapoalim: Israel’s leading bank
• Dynamic management team
• Strategic plan focused on growth while balancing risk/return
• Among the most actively traded stocks on the TASE and dedicated to our relations with investors
TASE: POLI
LSE: BKHD
ADR: BKHYY
15
THANK YOU