Bank Hapoalim Reports 2011 Financial Results - Center (NYSE:CSR), Eni (NYSE:E)

TEL AVIV, Israel, March 29, 2012 (GLOBE NEWSWIRE) -- Bank Hapoalim POLI BKHYY, Israel's leading financial group, today announced financial results for the fourth quarter and full year ended December 31, 2011.

Highlights of the 2011 financial statements:

Net Profit rose to NIS 2,746 million in 2011 compared with NIS 2,201 million in 2010, an increase of 24.8%.
Return on equity rose to 12.0% in 2011, compared with 10.4% in 2010.
Profit from financing activity totaled NIS 8,231 million in 2011, compared with NIS 7,775 million in 2010, an increase of 5.9%.
Total consolidated assets as at December 31, 2011 totaled NIS 356.7 billion, compared with NIS 321.1 billion at the end of 2010, an increase of 11.1%.
The Bank's total capital adequacy ratio continued its trend of improvement and reached 14.1% at the end of 2011, compared with 13.9% at the end of 2010.

Mr. Yair Seroussi, Chairman of the Board of Bank Hapoalim, commented:

"In 2011, Bank Hapoalim regained leadership of the banking sector. First and foremost, I would like to thank our employees, managers, and members of the Board of Management, primarily the Chief Executive Officer, for this impressive achievement. The outstanding financial results of Bank Hapoalim speak for themselves. We are beginning to reap the benefits of the clear multi-year strategic plan we presented three years ago.

Our 'back to basics' banking activity, our deep connection to our country, our values, and our focus on our customers have been the keys to the Bank's success. Bank Hapoalim is an essential pillar in the Israeli economy; these impressive results will enable us to continue to develop the Bank's activity and support the economy's growth.

This year, we continued to reinforce the Bank's resilience, based on a realistic understanding of the risks in the global macro-economic environment, while devoting substantial resources to the development of groundbreaking initiatives in banking, the improvement of service, and the advancement of banking activity within the various sectors of the Israeli economy.

Bank Hapoalim is a vibrant and creative organization, brimming with talent and motivation – a competitive organization focused on success. The quality of our banking service is derived primarily from the quality of our bankers. We appreciate our customers' confidence in us, and we will continue to develop the Bank's activity, according to the long-term strategic plan formulated by the Board of Directors," concluded Mr. Seroussi.

Mr. Zion Kenan, Chief Executive Officer of Bank Hapoalim, said:

"Today, I am proud to present the excellent financial results of Bank Hapoalim for 2011. Above all, these results demonstrate Bank Hapoalim's renewed leadership of the Israeli banking system, especially considering that they were achieved amid ongoing economic uncertainty and recurring turmoil in the global financial markets.

Our success within this challenging environment is a reflection of the loyalty of our customers, who choose us and honor us with their trust and appreciation, and of the professional skill and outstanding service they receive from all Bank Hapoalim employees, in Israel and globally. We combine this with the leadership of an excellent and extremely cohesive management team working together in harmony and synergy; these are the sources of our pride.

"The growth in net profit and the double-digit return on equity, alongside the improvement in capital adequacy, vividly reflect the strength of our core banking business and our commitment to achieve sustainable returns for the bank's shareholders, while taking into consideration the bank's risk appetite and the macro-economic conditions both in the Israeli economy and in the global economy," concluded Mr. Kenan.

Main developments in the Annual Report for the year 2011:

During this period, the Bank continued to successfully implement its three-year strategic plan. Impressive business results and double-digit return on shareholders' equity were achieved, in line with stated goals.

Profit from financing activity before provisions for credit losses totaled NIS 8,231 million in 2011, compared with NIS 7,775 million in 2010, an increase of 5.9%. The improved performance resulted mainly from an increase in the profit from regular financing activity and from income from adjustments to fair value of derivative instruments versus an expense which was recorded in 2010. This increase was partially offset by the effect of the initial implementation of the directive concerning credit loss provisions.

Profit from regular financing activity (excluding one-off and other irregular items) in 2011 totaled NIS 7,953 million, compared with NIS 7,492 million in 2010, an increase of 6.2%, mainly as a result of an increase in the volume of activity and the increase in the interest rate.

The provision for credit losses totaled NIS 1,202 million in 2011 compared with NIS 1,030 million in 2010. The expense was mainly related to the provision for debts examined on a group basis, mainly resulting from an increase in credit risk. As of January 1, 2011 the directive concerning the measurement and disclosure of impaired debts, credit risk, and provisions for credit losses was implemented, and therefore data on provisions for credit losses for 2011 are not fully comparable to data for 2010.

Operating and other income totaled NIS 4,852 million in 2011, compared with NIS 5,052 million in 2010, a decrease of 4.0%. The decline was primarily driven by a decrease in income from capital market related activities and was offset by an increase in income from credit cards.

Operating and other expenses totaled NIS 8,365 million in 2011, compared with NIS 8,291 million in 2010, an increase of 0.9%, mainly related to higher salary expenses.

Contribution to the community - The Bank continues to lead the Israeli banking sector in the area of social responsibility, with a focus on education, culture and welfare.Employees were involved in a wide and extensive range of community-focused activities, including social involvement, monetary donations, and large-scale volunteer projects. The Bank Group's corporate social responsibility (CSR) activity in 2011 totaled a financial value of approximately NIS 47 million.

Developments in Balance Sheet Items

The consolidated balance sheet as at December 31, 2011 totaled NIS 356.7 billion, compared with NIS 321.1 billion at the end of 2010, an increase of 11.1%.

Net Credit to the public totaled NIS 246.5 billion compared with NIS 225.3 billion at the end of 2010, an increase of 9.4%, due to an increase in all segments of activity.

Deposits from the public totaled NIS 256.4 billion compared with NIS 234.0 billion at the end of 2010, an increase of 9.6%, mainly from an increase in core deposits from the retail and commercial segments, versus a decrease in corporate deposits.

Shareholder's equity totaled NIS 23,845 million as at December 31, 2011, compared with NIS 22,561 million at the end of 2010, an increase of 5.7%.

Total Capital adequacy ratio was 14.1% at the end of 2011 compared with 13.9% at the end of 2010. Core Tier 1 Capital stood at 7.90% at the end of 2011 compared with 8.04% at the end of 2010. The decrease in the capital ratio mainly resulted from the adoption of new accounting directives regarding the measurement of impaired debts.

Conference Call Information

Bank Hapoalim will host a conference call today at 5:00 PM Israel Time / 4:00 PM Greenwich Mean Time / 11:00 AM Eastern Time to review the Bank's 2011 financial results.

To access the call, please dial: 1-888-281-1167 in the U.S. and Canada or (972-3) 918-0685 for international participants. No password is required. The presentation slides, earnings release and the 2011 financial statement will be available at the Company's website, www.bankhapoalim.com, under Investor Relations, Financial Information.

A replay of the teleconference will be made available approximately two hours after the conference call is completed, through April 6, 2012 by telephone at (972) 3-9255937 (international). A webcast replay will also be available by audio playback on www.bankhapoalim.com, under Investor Relations, Financial Information.

About Bank Hapoalim

Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim Group has over 280 branches, eight regional business centers, a growing network of business branches and specialized industry relationship managers for major corporate customers. The Bank Hapoalim Group includes Isracard Ltd, Israel's leading credit card company as well as financial companies involved in investment banking, trust services and portfolio management. Internationally, Bank Hapoalim operates through branches, subsidiaries and representative offices, in North and Latin America, Europe, the Far East, Turkey and Australia. Bank Hapoalim is the only Israeli Bank listed on both the Tel Aviv and London Stock Exchange. In addition, a Level-1 ADR is traded "over-the-counter" in New York.

For more information about Bank Hapoalim, please visit us online at www.bankhapoalim.com.

Principal Data of the Bank Hapoalim Group
					NIS millions
Profit and Profitability

	2011	2010	2009	2010	2009
Profit from financing activity before provisions for credit losses	8,231	7,775	6,718	5.9%	22.5%
Operating and other income	4,852	5,052*	5,039*	(4.0%)	(3.7%)
Total income	13,083	12,827*	11,757*	2.0%	11.3%
Provisions for credit losses	1,202	1,030	2,017	16.7%	(40.4%)
Operating and other expenses	8,365	8,291*	7,457*	0.9%	12.2%
Net operating profit attributed to the shareholders of the Bank	2,741	2,185*	1,272*	25.4%	115.5%
Profit from extraordinary transactions, after taxes, before attribution to non controlling interests	5	16	28	(68.8%)	(82.1%)
Net profit attributed to the shareholders of the Bank	2,746	2,201	1,300	24.8%	111.2%


Balance Sheet – Principal Data
		December 31		Change vs.
	2011	2010	2009	2010	2009
Total balance sheet	356,688	321,089*	309,757*	11.1%	15.2%
Net credit to the public	246,495	225,288	215,788	9.4%	14.2%
Securities	34,411	31,604	28,055	8.9%	22.7%
Deposits from the public	256,417	233,965	231,993	9.6%	10.5%
Bonds and subordinated notes	32,933	27,608	23,112	19.3%	42.5%
Shareholders' equity	23,845	22,561*	20,097*	5.7%	18.6%
Total problematic debts as reported in the past		14,895	16,636
Total problematic credit risk under the new directive**	12,799	14,575***		(12.2%)
Of which: impaired balance-sheet debts**	7,044	8,316		(15.3%)

Main Financial Ratios
			2011	2010	2009
Net loan to deposit ratio			96.1%	96.3%	93.0%
Net loan to deposit ratio including bonds and subordinated notes			85.2%	86.1%	84.6%
Shareholders' equity to total assets			6.7%	7.0%*	6.5%*
Core Tier I capital to risk-adjusted assets			7.9%	8.0%*	7.5%*
Tier I capital to risk-adjusted assets			8.7%	8.9%*	8.3%*
Total capital to risk-adjusted assets			14.1%	13.9%*	13.5%*
Financing margin from regular activity(a)			2.52%	2.59%	2.36%
Cost-income ratio			63.9%	64.6%*	63.4%*
Rate of provisions for credit losses for the period, of total credit to the public(b)			0.48%	0.49%	0.90%
Net return of operating profit attributed to shareholders of the Bank on equity			12.0%	10.3%*	6.6%*
Net return of profit attributed to shareholders of the Bank on equity			12.0%	10.4%*	6.8%*
Basic net profit per share in NIS attributed to shareholders of the Bank			2.07	1.66*	0.99*
Diluted net profit per share in NIS attributed to shareholders of the Bank			2.05	1.65*	0.98*
* Restated, due to the retroactive implementation of the directives of the Supervisor of Banks regarding financial reporting on employee benefits.
Most of the change is in the items "operating and other income," "other expenses," and "shareholders' equity.
" For further details, see Note 1(E)(18) in the Financial Statements.
** Net of the individual allowance and the allowance according to the extent of arrears.
*** Pro forma data.
(a) Calculation: Financing profit from regular activity is divided by monetary assets generating financing income.
(b) In 2011, calculated as the provisions for credit losses as a percentage of the recorded balance of credit to the public.
In previous years, calculated as the specific provision for the period as a percentage of total credit to the public.

Profit and Profitability
	For the three months ended
	Dec. 31 2011	Sept. 30 2011	June 30 2011	March 31 2011	Dec. 31 2010
	NIS millions
Profit from financing activity before provisions for credit losses	2,087	1,750	2,142	2,252	2,133
Operating and other income	1,146	1,207	1,224	1,275	1,315*
Total income	3,233	2,957	3,366	3,527	3,448*
Provisions for credit losses	363	498	327	14	100
Operating and other expenses	2,197	2,033	2,013	2,122*	2,310*
Net operating profit attributed to the shareholders of the Bank	670	470	711	890*	701
Profit from extraordinary transactions, after taxes, before attribution to noncontrolling interests	2	1	1	1	12
Net profit attributed to the shareholders of the Bank	672	471	712	891*	713

Balance Sheet – Principal Data
	Dec. 31 2011	Sept. 30 2011	June 30 2011	March 31 2011	Dec. 31 2010

Total balance sheet	356,688	341,993	323,808	319,682*	321,089*
Credit to the public, net	246,495	244,577	234,069	229,835	225,288
Securities	34,411	27,789	27,701	28,932	31,604
Deposits from the public	256,417	242,931	233,237	231,769	233,965
Bonds and subordinated notes	32,933	32,050	29,962	28,295	27,608
Shareholders' equity	23,845	23,076	22,732	22,434*	22,561*
Total problematic credit risk under the new directive**	12,799	13,233	13,263	13,590	14,575***
Of which: impaired balance-sheet debts net of individual provision	7,044	7,170	7,530	7,840	8,316

Main Financial Ratios
	For the three months ended
	Dec. 31 2011	Sept.30 2011	June 30 2011	March 31 2011	Dec. 31 2010
Net loan to deposit ratio	96.1%	100.7%	100.4%	99.2%	96.3%
Net loan to deposit ratio including bonds and subordinated notes	85.2%	88.9%	88.9%	88.4%	86.1%
Shareholders' equity to total assets	6.7%	6.7%	7.0%	7.0%*	7.0%*
Core Tier I capital to risk-adjusted assets	7.9%	7.7%	7.9%	7.9%*	8.0%*
Tier I capital to risk-adjusted assets	8.7%	8.5%	8.7%	8.7%*	8.9%*
Total capital to risk-adjusted assets	14.1%	13.6%	14.1%	13.9%*	13.9%*
Financing margin from regular activity^(a)(b)	2.39%	2.55%	2.64%	2.62%	2.61%
Cost-income ratio	68.0%	68.8%	59.8%	60.2%*	67.0%*
Rate of provisions for credit losses for the period, of total credit to the public^(a)(c)	0.58%	0.80%	0.55%	0.02%	0.45%
Net return of operating profit attributed to shareholders of the Bank on equity^(a)	11.9%	8.5%	13.2%	17.0%*	13.3%*
Net return of profit attributed to shareholders of the Bank on equity^(a)	11.9%	8.5%	13.2%	17.0%*	13.5%*
Basic net profit per share in NIS attributed to shareholders of the Bank	0.51	0.36	0.54	0.67*	0.54
Diluted net profit per share in NIS attributed to shareholders of the Bank	0.5	0.35	0.53	0.67	0.54
* Restated, due to the retroactive implementation of the directives of the Supervisor of Banks regarding financial reporting on employee benefits. Most of the change is in the items "operating and other income," "other expenses," and "shareholders' equity." For further details, see Note 1(E)(18) in the Financial Statements.
** Net of the individual allowance and the allowance according to the extent of arrears.
*** Pro forma data
(a) Calculated on an annualized basis.
(b) Calculation: Financing profit from regular activity is divided by monetary assets generating financing income.
(c) In periods referring to 2011, calculated as the provisions for credit losses as a percentage of the recorded balance of credit to the public. In 2010, calculated as the specific provision for the period as a percentage of total credit to the public.

CONTACT: Press: Ofra Preuss, Bank's Spokesperson Tel: +972-3-567-3635; Fax: +972-3-567-3500 spokesperson@mailpoalim.co.il Investors: Effie Werber, Head of Investor Relations Tel. +972-3-567-3440; Fax: +972-3-5673470 effie.werber@mailpoalim.co.il

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