30 August 12 17:44–The economic slowdown has reached the banks. The aggregate net profit of the five big banks fell 20% to NIS 3.22 billion in the first half of 2012. Higher provisions for credit losses was the main cause of the drop, as well as lower income from fees, mainly because of the decline in capital market activity, reflected in low turnover on the Tel Aviv Stock Exchange (TASE).

The freeze, and even dip, in credit to the public at most of the banks in the first half also stood out. However, retail credit, especially mortgages, rose strongly, and is now the credit growth engine.

Bank Hapoalim (TASE: POLI) posted the largest net profit, of NIS 1.27 billion in the first half, but this was still 21% less than the profit in the corresponding half of last year. Mizrahi Tefahot Bank (TASE:MZTF) had the largest return on equity of the five big banks, at 14.3%, after posting 11.4% net profit growth compared with the corresponding half.

Only Bank Hapoalim and Mizrahi Tefahot Bank achieved double-digit return on equity. Most of the banks believe that they will report a further drop in profits for the rest of the year, because of the likely worsening economic slowdown…Read More>>

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