Bethel Finance: Hapoalim transfers NIS 8.5b deposits to foreign central banks

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Bethel Finance news:
Bank Hapoalim (TASE: POLI) has reduced its deposits with the Bank of Israel and increased its deposits in foreign central banks, mainly the US Federal Reserve, in January-September 2011. Altogether, Bank Hapoalim transferred NIS 8.5 billion in deposits from the Bank of Israel to foreign central banks.

In its financial report for the third quarter, Bank Hapoalim said that it reduced its deposits with the Bank of Israel from NIS 36.8 billion at the end of 2010 to NIS 28 billion at the end of September; half the reduction was made during the third quarter. At the same time, Bank Hapoalim increased its deposits with the Fed from $1.5 billion to $3.6 billion, and increased its deposits with foreign central banks from NIS 5.5 billion at the end of 2010 to NIS 14 billion at the end of September.

Bank Hapoalim said, "For reasons of caution, the bank continues to deposit a large part of its liquid foreign currency balance in at the US Federal Reserve at low yields."

Bank Hapoalim added in its financial report that many private banking clients transferred their money from the capital market to bank deposits. The bank said that deposits by private banking clients rose 11%, or NIS 11.8 billion, in January-September.

During the third quarter, Bank Hapoalim reduced credit lines to customers by 10%, or NIS 3.8 billion, to NIS 33.4 billion at the end of September, in order to reduce its risk assets. Bank Hapoalim has the second-largest amount of deposits from the public, after Bank Leumi (TASE: LUMI). Bank Hapoalim had NIS 243 billion in deposits from the public at the end of September 27% of the public's total deposits. 72% of the deposits, or NIS 175 billion, are from the retail banking sector - households, private banking customers, and small businesses.

Bank Hapoalim managed NIS 740 million of customers' money at the end of September, including NIS 619 billion in its securities portfolio. The interest rate spread (excluding derivatives) between the cost of credit on customers' deposits and the interest that the bank pays on them averaged 1.96% in January-September.

Bank Hapoalim's share price rose 1.4% in morning trading to NIS 13.30 to NIS 17.4 billion.