As expected, Bank Hapoalim reported a steep drop in profits for the third quarter and climbing provision for doubtful debt.
Hapoalim, the biggest bank in Israel, netted NIS 147 million for the third quarter. Is result is down 68% from the parallel quarter of 2000, when it netted NIS 454 million.
Profits for the nine months were down 40% from the parallel period to NIS 752 million. For the same period of 2000 the bank netted NIS 1.2 billion. Its yield on capital this year is a low 8.4% compared with 15.4% last year.
Provision for doubtful debts soared by 108% to NIS 403 million for the third quarter, or NIS 722 million from January 1, an increase of 32%. The bank explained the increase by the local slowdown being exacerbated by the terror attacks in the United States in September.
Under a directive issued by the Supervisor of Banks, Hapoalim was supposed to have made a general provision of NIS 386 million for doubtful debt, of that NIS 193 million in the third quarter.
But after the bank increased its specific provisions for doubtful debt, it (and other banks) asked the Supervisor to rescind the directive. In the end, Hapoalim increased its general provision at the Supervisor's request by only NIS 10 million.