May 24, 2018 / 5:50 AM / 6 months ago

Israel's Bank Hapoalim Q1 profit narrows on U.S. tax probe provision

JERUSALEM, May 24 (Reuters) - Bank Hapoalim, Israel’s largest lender, reported a drop in quarterly net profit that missed estimates due to a provision in connection with a United States tax evasion investigation and on higher credit loss expenses.

Hapoalim said on Thursday it earned 628 million shekels ($176 million) in the first quarter, down from 767 million shekels a year earlier and compared with 799 million shekels forecast in a Reuters poll of analysts.

The bank set aside an additional provision of 60 million to cover a possible future settlement the U.S. tax evasion probe. It previously had provisioned a total of $348 million.

Hapoalim said it would pay a quarterly dividend of 251 million shekels, or 18.35 per share, representing a payout of 40 percent of net profit.

Net interest income rose to 2.16 billion shekels in the quarter from 2.07 billion a year earlier while credit loss expenses jumped to 250 million shekels from 107 million.

Its core Tier 1 capital ratio to risk-weighted assets, a key measure of financial strength, slipped to 11.05 percent from 11.26 percent at the end of 2017. ($1 = 3.5695 shekels) (Reporting by Steven Scheer, Editing by Ari Rabinovitch)

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