Beinleumi: Net profit fell by 8.5% - bank to distribute exceptionally large dividend
Bank Beinleumi finished the quarter with a net profit of 583 million shekels and a return on equity of 16%, against the backdrop of the special tax impact. At the same time, credit to the public jumped by 20% to 164 billion shekels, while credit portfolio quality indicators continued to improve and the ratio of problematic debts fell to 0.40%.
Bank Beinleumi, under the management of Eli Cohen, recorded an 8.5% decrease in net profit, which totaled 583 million shekels. The return on equity stood at 16%, compared to 18% in the corresponding quarter. Excluding the special tax imposed by the state, it would have stood at 17.8% (similar to the adjusted return presented by Bank Leumi).
In the first half of the year, Beinleumi's net profit totaled 1.1 billion shekels, a decrease of 8.9% compared to the corresponding half of last year. The return on equity for the half-year stood at 14.5%, and if the special tax is excluded, it would have stood at 16.2%.
The bank's net interest income totaled 1.2 billion shekels, a decrease of 7.6% compared to the corresponding quarter. Among the factors that influenced the income were the decrease in interest rates in the economy over the past year as well as the increase in competition between banks in providing credit and interest on deposits. In the first half of the year, the bank's income totaled 2.3 billion shekels, a decrease of 6.6% compared to the corresponding half of last year.
The main increase in credit risk stems from credit for financial services
Credit to the public totaled 164 billion shekels, a sharp increase of 20% compared to the corresponding period last year and 5.9% compared to the first quarter of 2026. The bank explained that the main increase in credit risk stems from credit for financial services. In the credit portfolio, a 25% decrease in problematic credit risk was recorded in the first half of the year compared to the corresponding period last year. The NPL ratio, which is the rate of debts that are non-accruing or 90 days or more overdue, continued to improve and stood at 0.40% compared to 0.46% at the end of 2025.
Despite the decrease in net profit in the quarter compared to the corresponding one, the bank's board of directors is dealing with its "problem," which stems from profit balances eligible for distribution. Since the larger these profits are, the more the return on equity is eroded. The board of directors decided on a dividend distribution of approximately 558 million shekels, meaning an amount that constitutes about 96% of the total net profit for the quarter (Leumi and Hapoalim distributed 50% each of the net profit). Beinleumi noted that this distribution includes about 50% of the net profit for the second quarter and an additional amount from the balance of profits eligible for distribution.
Bank CEO Eli Cohen noted that alongside the strength of Beinleumi's activity in the capital market:
"We continue to be a central financial partner for the leading companies in the economy, small businesses, and private clients. The expression of trust and commitment of the clients to the bank allows for accelerated growth in the credit portfolio and client assets. The strong results we are presenting in the second quarter of 2026 are the clearest evidence that in an era of frequent changes in the local and global economy, clients are looking above all for an anchor of stability, expertise, and experience. These are what Bank Beinleumi continues to provide, while maintaining high capital adequacy and credit portfolio quality among the best in the system."
