Bank Hapoalim (TASE:POLI) Can Strong ROE Keep Margin Doubts In Check

Bank Hapoalim B.M. came into earnings with the stock essentially treading water over the past week and slightly weaker over three months, which suggested investors were cautious after a strong earlier run. Q2 shifted that lukewarm mood. The bank delivered net income of ₪2.49b with basic EPS of ₪1.90 and described the quarter as “excellent,” supported by a return on equity of around the mid teens.

The key point is that profitability at Bank Hapoalim looked strong, and the market now has to decide whether the recent share price drift still makes sense.

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Q2 2026 Earnings Summary

• Total Revenue (Q2 2026 vs Q2 2025): ₪6,319m vs. ₪6,143m (up about 2.9%)
• Net Income (Excl. Extra Items, Q2 2026 vs Q2 2025): ₪2,488m vs. ₪2,542m (down about 2.1%)
• Basic EPS (Q2 2026 vs Q2 2025): ₪1.90 vs. ₪1.93 (down about 1.6%)
• Cost to Income Ratio (Q2 2026 vs Q2 2025): 30.6% vs. 32.8% (improved efficiency)

Tired of staring at walls of figures to make sense of Bank Hapoalim B.M's story? Get a clean visual snapshot of the bank's valuation and key drivers in the company report for Bank Hapoalim B.M.

Bank Hapoalim Q2 Milestones Support Bullish Story

Bulls argue that Bank Hapoalim can pair strong credit growth with high profitability, tight costs and disciplined capital returns. Q2 goes a long way toward ticking those boxes. Total credit reached ₪536b with 3.3% quarterly and 14.3% yearly growth, which lines up directly with the thesis of broad based expansion across retail, mortgages, mid market and corporate books.

Profitability also matched the script. ROE of 15%, or 16.4% excluding the special bank tax, together with a 30.6% cost to income ratio, shows the bank is currently delivering the high margin, high efficiency profile bulls expect. Asset quality and reserves stayed conservative, which supports the claim of balance sheet protection. Finally, the 50% payout through a mix of dividends and buybacks is consistent with the promised capital return framework rather than just a one off decision.

Reveal where the surface looks calm but the multi year models start to disagree on Bank Hapoalim B.M's next inflection point by accessing the full revenue, EPS and ROE analyst estimates for Bank Hapoalim B.M.

Bear Warnings On Margins And Credit Still Unresolved

Bears argue Bank Hapoalim’s premium margins and rapid credit growth are vulnerable once rates fall or the cycle cools. Q2 does not disprove that. Net interest margin of 2.70% leaned on a one off CPI uplift of ₪431m, so the clean margin resilience in a lower rate setting is still untested. Credit grew 14.3% year on year to ₪536b, which fits the concern that the bank is leaning hard into expansion just as macro support might fade.

The bearish credit cycle risk also remains open. The non performing loan ratio is only 0.5% with allowance coverage around 3x, so there is no sign of stress yet, but that also means provisions of ₪298m at a 22 bps cost of risk give little evidence of how the book behaves in a tougher scenario.

After a quarter where non performing loans stayed low, it is fair to ask whether current provisions and dividend decisions mask deeper fragilities. Review our independent risk analysis for Bank Hapoalim B.M which shows 1 important warning sign

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Seeking Alternatives Before The Crowd Moves

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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