Top banks notch record profits from credit and fee growth during wartime

Gap widens between banks’ soaring gains and the financial reality of ordinary Israelis

By Sharon Wrobel

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15 August 2025, 8:47 am

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Sharon Wrobel is a tech reporter for The Times of Israel

Illustrative: View of the Bank Hapoalim offices in the center of Tel Aviv. August 4, 2015. (Miriam Alster/Flash90)

Israel’s major lenders Hapoalim, Leumi, and Discount banks this week posted more record profits as they continued to cash in on high interest payments, credit fees and other charges paid by thousands of households and businesses mired in war and economic hardship.

Israel Discount Bank on Thursday reported record results for the three-month quarter ending in June, as the country’s third-largest lender saw its profit jump 6.7 percent to NIS 1.12 billion ($331 million) from the same quarter in 2024.

Discount Bank said the “strong performance was largely driven by an increase in revenues,” bolstered by a rise in income from net interest, credit fees and other commissions paid by mortgage and loanholders.

Discount’s net interest income in the April-June quarter soared 10% to NIS 2.66 billion ($790 million) from the first three months of 2025, and by 1.5 percent year-on-year. The bank’s credit provided to the public increased by 9% year-on-year, amounting to NIS 277 billion ($82 billion).

Meanwhile, the bank’s income generated from fees during the reported quarter surged 10.3% to NIS 526 million compared with the corresponding period a year ago.

Earlier this week, Bank Leumi saw its second-quarter profit surge to NIS 2.6 billion ($770 billion), a 15% year-on-year increase. Net interest income rose by 3.7% to NIS 4.54 billion ($1.34 billion) over the period, bolstered by growth in the credit provided to households and corporate customers.

Bank Hapoalim reported a profit of NIS 2.5 billion ($740 million) in the second quarter of 2025, up 14% year-on-year. Hapoalim said its financial results were driven by a 15.1% increase in financing income and an 8.2% surge in fees, alongside strong credit growth.

The country’s largest banks have come under scrutiny for generating hefty profits that defy economic conditions of local businesses and households, which are grappling with high mortgage and lending payments, and with many barely making ends meet after 22 months of war with the Hamas terror group.

A man stands at an Israel Discount Bank ATM in Jerusalem, on July 1, 2013. (Nati Shohat/Flash 90)

Since war broke out on October 7, 2023, households and businesses have been contending with a series of war-related tax and price hikes, falling deeper into debt, while interest rates have remained high. Despite the outbreak of fighting, the Bank of Israel has cut borrowing costs only once since Oct 7, in January 2024, with the rate remaining at 4.5% ever since.