Israel’s Hapoalim ready to resume regular dividends after one-off payment – CFO
JERUSALEM, Aug. 3 (Reuters) – Bank Hapoalim (POLI.TA) is confident its financial situation will allow it to resume ordinary dividend payments once the regulator gives the green light, CFO Ram Gev said on Tuesday. . Hapoalim, one of Israel’s two largest banks, on Sunday became the first to announce an extraordinary dividend after the supervisor of the country’s banks last month told lenders they could make a one-time payment up to at 30% of 2020 net profit. At the start of the coronavirus pandemic last year, the central bank asked lenders to halt dividend payouts and share buybacks, but also reduced fund requirements clean.
This remains in place until September, and the Bank of Israel has said it is considering whether to extend or end this policy by reviewing European and other directives from regulators.
The European Central Bank has lifted restrictions on bank dividend payments and share buybacks beyond September. Gev called Hapoalim’s planned dividend of NIS 616.8 million ($ 191.5 million) for August 18 a “catching-up” to the inability to pay last year and a signal that bank reserves are high and business is returning to normal.
He said a regular dividend policy of 40% of net profit remained and would resume once the central bank’s temporary order was completed. “Maybe we will consider increasing it (from 40%) but that depends on the Bank of Israel and other relevant circumstances. And we want to get back to our dividend policy as quickly as the temporary order takes. late, “Gev told Reuters. He said the bank would also like to consider share buybacks, while also hoping to issue contingent convertible bonds (CoCo) to optimize the capital structure. In the meantime, Gev said Hapoalim’s record is strong, especially after building up large reserves in 2020 to deal with the pandemic.
The bank started writing off some of those default provisions earlier this year, but Gev said Hapoalim – due to the release of second quarter results this month – would be able to cope with any fallout. if the Delta variant led to an economic deterioration.
“We are seeing the economy picking up and the demand for credit… so the situation in terms of the pandemic is not like in the first or second wave,” he said.
His main rival, Leumi (LUMI.TA) said his board will discuss the dividend issuance when the second quarter results are released this month. Mizrahi Tefahot (MZTF.TA) and Israel Discount Bank (DSCT.TA) declined to comment on their dividend plans.
Reporting by Steven Scheer; Editing by Alison Williams
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