March 20, 2014 / 6:17 AM / 3 years ago

Israel's Bank Hapoalim Q4 profit flat, beats expectations

TEL AVIV, March 20 (Reuters) - Bank Hapoalim, Israel's largest lender, reported flat quarterly profit as higher income from fees offset a slight drop in financing income.

Hapoalim on Thursday said it posted fourth-quarter net profit of 651 million shekels ($188 million), compared with 652 million a year earlier but above expectations of 607 million shekels in a Reuters poll of analysts.

Net financing income slipped to 2.07 billion shekels from 2.11 billion, while it had a gain in its provision for credit losses of 59 million shekels compared with a charge of 54 million.

Fees and other income increased to 1.39 billion shekels from 1.31 billion.

Hapoalim's core Tier 1 capital ratio to risk-weighted assets rose to 9.4 percent at the end of 2013 from 8.9 percent at the end of 2012.

The bank's board approved a dividend of 106 million shekels for the fourth quarter, to complete a distribution of 15 percent of 2013 annual net profit, totalling 382 million shekels.

"We believe in our ability to produce a low double-digit return on equity in the medium to long-term. This target reflects the bank's risk appetite in light of changes in the economic environment and ever-increasing competition," Chairman Yair Seroussi said.

Zion Kenan, Hapoalim's chief executive, said that during 2013 the bank improved the quality of its credit portfolio by tightening risk management and reducing portfolio concentration.

$1 = 3.4623 Israeli Shekels Reporting by Tova Cohen; Editing by Steven Scheer

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