Trade in

Bank Hapoalim

shares on the Tel Aviv Stock Exchange was suspended as the bank released its fourth-quarter financial statement. Hapoalim revealed a growing net profit for the year, growing salaries and a stagnating net profit for the fourth quarter.

"Hapoalim is traded at a discount," Chairman Shlomo Nehama told the press at a conference called to present the bank's results.

On the bank's decision to wait with a Wall Street listing, Nehama said it could have gone ahead. "The investment banks we talked with said we would have no problem raising money. But I recommended to the bank's board that we wait for the bank's price on the market to rise, and I'm glad my recommendation was accepted," Nehama said.

Bank Hapoalim's market cap is at $3.3 billion.

Nehama added that it is strategically important for Hapoalim to list for trade on Wall Street, but that there's no time pressure to do so. It isn't happy about the low volumes of trade on the Tel Aviv Stock Exchange, but the timing of a New York issue depends on the conditions of the market and share price, which is too low these days, Nehama said.

Nehama: Hi-tech won't return to glory until late 2002

He also noted that the bank's excellent results for the year were generated by the economy's bloom during the first three quarters of 2000. But growth all but stopped in the fourth quarter, he said.

While hi-tech fueled much of the growth during 2000, Nehama said he doesn't see it being relevant to economic growth until the second or even the third quarter of 2002.

Nehama said this is the time to focus on growth in traditional industry sectors and to increase investment in construction and national infrastructure.

On Hapoalim's hi-tech investments - through granting credit to startups in exchange for warrants - Nehama said the policy had worked very well. "Our exposure to hi-tech is relatively small. We put up credit of $80 million to $100 million, and not all of it was exploited," he said.

He said the bank had several successful exits over the last couple of years. Hi-tech will continue to be important, and he believes there will be more companies like giants

Check Point Software Technologies

(Nasdaq:CHKP) and

Comverse Technology

(Nasdaq:CMVT) sprouting from the slew of young startups still being established. Moreover, he noted, Hapoalim wants relations with companies like that.

Despite his dire prediction that hi-tech isn't going to recover in a quarter or two, Nehama is chirpy on the economic prospects for 2001. He says that if the American economy fulfills predictions of recovery in the second half, and Europe rallies too, the Israeli economy will pick up in their wake. The pervasive gloom is misplaced, he concludes. Maybe times will be tough for a while, but the Israeli economy is built on solid foundations, Nehama ruled.

Disagreement at the bank over key lending rates

Nehama also took the opportunity to call on the central bank to accelerate the pace of lowering key lending rates.

Not that he represents the whole bank: CEO Amiram Sivan stated that the Bank of Israel's gradual policy is the right one. "Interest should be lowered gradually and cautiously, given that the global environment these days could lead to rapid changes in exchange rates," Sivan said.

Net for the year jumped 15%

Hapoalim reports netting NIS 1.62 billion, 15.1% more than in 1999. The bank's earnings in the fourth quarter of 2000 came to NIS 391 million, about the same as in the corresponding quarter of 1999.

The bank also presented improved in return on capital, which came to 15.1% in 2000 compared with 13.6% in 1999.

Credit to customers expanded by 14.2% from 1999 to NIS 154.9 billion in 2000. Public deposits at the bank rose 11% in 2000 to NIS 177 billion.

The bank's equity came to NIS 12 billion, up 9.8% from the equivalent period, out of the overall balance, which comes to NIS 223.1 billion.

Provision for doubtful debts declined by 6.5% in 2000 to NIS 694 million.

Another record: Salaries

The data released by the bank indicates it broke another record - in salaries.

First place in the list of high-earners among public companies (until now occupied by Gershon Salkind of Elco Holdings) was taken by storm by bank chairman Amiram Sivan, with a NIS 10.2 million paycheck for 2000 - up NIS 1.6 million from the previous year.

His colleagues aren't doing badly either. Chairman of the bank's board of directors Shlomo Nehama made NIS 7.1 million in 2000, 22% more than his salary in the previous year. His deputy, Dan Dankner, made do with a humbler NIS 3.9 million, almost twice his salary in 1999, which came to NIS 2 million.

&nbsp

Q4 '00

Q4 '99

2000

1999

Revenues
before
doubtful debts

1,464

1,195

5,348

4,730

Provision for
doubtful debts

156

290

694

742

Pretax
profit

&nbsp

&nbsp

2,889

2,499

Net profit

391

392

1,629

1,415

Profit per share
(NIS)

&nbsp

&nbsp

1.31

1.14