Loan fees fuel wartime windfall for Hapoalim as bank profits jump 25%

Bank Hapoalim, one of Israel’s two largest lenders, saw its net profit jump 25% to NIS 2.42 billion ($682 million) in the first three months of the year, propelled by income from net interest and fees from raised borrowing costs for mortgage and loan holders, the bank says.

Net profit in the first quarter of 2025 increased from about NIS 1.94 billion ($547 million) during the same period in 2024. Net interest income in the first three months of the year rose 12% to about NIS 4.28 billion ($1.21 billion) year-over-year. Fee income amounted to NIS 1.06 billion ($299 million) in the first quarter, a 9% increase compared with the same quarter last year. Hapoalim attributes the increase mainly to “growth in credit processing fees, credit card fees, and securities fees.”

The country’s banks have been accused of wartime profiteering on high interest rates for loans and mortgages squeezed out of increasingly debt-ridden Israelis, posting record profits as much of the rest of the country struggles to make ends meet amid the rising cost of living expenses and an economy battered by war.

Public borrowing in the first quarter of 2025 totaled NIS 455.6 billion ($128 billion), up 10.8% from the NIS 411.3 billion ($116 billion) recorded in the first quarter of 2024. Corporate credit increased by 17.6% year-on-year.

Total income rose to NIS 5.69 billion ($1.6 billion) in the first three months of 2025 from NIS 5.09 billion ($1.4 billion) a year earlier. Operating and other expenses dropped by 29.1% in the first quarter compared to the previous three months, when the bank carried a NIS 597 million ($169 million) expense for an early retirement plan on its books.