Bank Hapoalim B.M.

Investor Presentation • Aug 14, 2023

2Q23 Quarterly Financial Review

Disclaimer

This presentation includes condensed information and selected data from Bank Hapoalim's 2Q23 financial results .

This presentation is not a substitute for the Bank's 2Q23 Financial Statements, which include the full financial information, including forward -looking information . The financial statements are available on the Bank's website at www .bankhapoalim .com - Investor Relations/Financial Information .

Some of the information in this presentation that does not refer to historical facts constitutes forward -looking information, as defined in the SecuritiesLaw.

Forward-looking statements regarding the Bank's business, financial condition, and results of operations, are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated . Such forward-looking statements include, but are not limited to, product demand, pricing, market acceptance , changing economic conditions, risks in product and technology development, and the effect of the Bank's accounting policies, as well as certain other risk factors detailed from time to time in the Bank's filings with the securities authorities .

Data relating to business segments is presented according to "operating segments based on management approach " as disclosed in note 28 A in the bank's annual report.

Dummy Text

2Q23 Quarterly Financial Review

Highlights of the second quarter

Continuous robust profitability

• o Continued positive trend in income, driven by activity growth, interest-rate hikes and inflation
• o Strong efficiency metrics

Responsible and diversified credit growth

o Growth pace in line with sector and macro dynamics o Diversified growth across business economic sectors

% 2Q23 1.5QoQ

Credit growth * Of growth is in non-real estate economic sectors >70% QoQ

High quality loan book; further build of reserve

• o Credit quality metrics remain strong
• o Increase in the provision for credit losses, mainly in the collective provision, to reflect the increase in macro economic uncertainties

NPL ratio 0.81%

NPL coverage ratio % 185

0.56% credit loss ratio due to reserve build

Fortress balance sheet

• o Strong buffers of capital, liquidity and credit loss reserve
• o Capital surplus allows for the continued 40% dividend payout ratio

CET-1 capital ratio LCR

** Allowance ratio % 1.74

* Debts in Israel, as defined in table D-3 in the report on risks and in slide 7. ** Allowance in respect of loans, including off-balance sheet items.

2Q23 // Quarterly iF nancial R evi e w

5

Fortress balance sheet; substantial buffers in place

CAPITAL

CET-1 capital Total capital * ** ratio ratio 11.51%

14.68%

Shareholders' equity growth

* CET-1 capital ratio: vs. min. regulatory req. of 10.23% and min. internal target of 10.5% ** Total capital ratio: vs. min regulatory req. of 13.5%

Balance of allowance NSFR * to total credit 125% 1.74% Of which:

* Allowance in respect of loans, including off-balance sheet items

Strict and responsible risk-management approach

Responsible growth in credit portfolio

% % 1.5QoQ 2.9YTD

Diversified growth across * business economic sectors

NIS billion, QoQ

Real estate	1.5
Financialservices	2.1
Commerce	1.0
Electricity and water supply	1.3
Others	-0.5
Total business debt growth b	5.4

* Debts in business segments in Israel according to table D-3 in the report on risks.

Focus on customers whose main sector of activity is housing * construction

** Real estate under construction

% % Allowance to loans 99 in the real estate sector Can absorb a price drop of up to 25% without causing the bank a loss

Sound buffers for any development

Average LTV of housing loans

46%

in Israel

Housing loans

* For full disclosure regarding segmentation of credit risk in the construction and real-estate sectors in Israel, by customers' principal area of activity, refer to table 3-5 in the financial report. ** For full disclosure regarding credit risk in the real-estate sector at the Corporate Banking Division in Israel, by financing rate (LTV) and absorption capacity refer to table 3-7 in the financial report.

7

2Q23 Quarterly Financial Review

MACROECONOMIC REVIEW 2Q23 RESULTS

8

Headwinds from global and domestic circumstances, while financial conditions remain sound

Fiscal stance remains a pillar for stability; public deficit Macro uncertainties didn't spill into the fixed-income market as % of GDP

Source: IMF, Israel- MOF

Dummy Text

Capital raised by hi-tech companies, \$ billion New home sales fell; price increases halted Inflation has decreased to a level similar to the US and Eurozone

Source: Bloomberg

Source: Bloomberg

Revenue momentum leads to further growth in margins; supportive macro conditions are close to exhaustion

Total income

NIS million

Inflation expectations are anchored in the target

Break-even inflation curve, as of August 6, 2023

The high interest rate environment is characterized by a migration of customers from non-interest bearing to interest bearing deposits

Responsible credit growth; pace aligned with the changing environment

Credit growth in line with sector and macro dynamics

NIS billion

39.0 38.9 38.3 38.0

2Q22 4Q22 1Q23 2Q23

12

2Q23

R

evi

e

w

Dummy Text

Consumer

Deposits continue to grow; strong liquidity buffers in place

Strong efficiency indicators; wage agreement encourages further improvement in productivity

Collective wage agreement signed in July 2023

Main principles

For 5 years (2023-2027)

Nominal wage raise (not in percentage) of up to NIS 1,000 per employee, of which NIS 300 performance-based (minimum of 15% ROE in 2026-2027).

Future bonus mechanism decreased to max. 2.5 monthly salaries per year.

Payment of a one-time grant in the amount of two monthly salaries.

Option to terminate employment due to lack of fit.

Agreements regarding the upcoming relocation to "Poalim Center".

Impact of approx. NIS 200 m increase in salary and related expenses, in the first half of 2023 (of which, NIS 80 m in 2Q23), mainly in respect of the one-time grant.

Dummy Text

Note: For full disclosure of the agreement refer to note 8-D in the financial report.

Continuing to increase collective allowance to reflect the increase in uncertainty in economic conditions

Provision for credit losses

The increase in the allowance for credit losses, mainly due to higher collective provision and net automatic charge offs, resulted primarily from:

Adjustments in respect of macroeconomic effects, in view of the increase in the probability of economic deceleration and a high interest-rate environment over a long period;

Improvements in the provision model methodology;

Resilient asset quality; problematic debt increased while NPL declined; continued build of allowance buffer

Total problematic debt & NPL ratio Allowance balance & NPL coverage ratio

NIS million NIS billion

* Balance sheet allowance for credit losses to NPL. ** Proforma data. The proforma allowance for credit losses includes the effect of the initial implementation of CECL.

Strong organic capital generation and buffer creation allow for 40% dividend payout ratio

% % in respect of 2Q23 profit NIS million 10.23 CET-1 min. regulatory req. 30.6.23 11.51% vs. 31.12.22 11.25%

CET-1 capital ratio

Strong growth
in shareholders'	44.2	46.5	49.3
equity
NIS billion
	2Q22	4Q22	2Q23

Increase in dividend payout ratio

% 10.5 CET-1 min. internal target 40 dividend

High dividend yield\**

in respect of the last four profits yield

NIS billion Dividend 2.6 6.2 declared quarters' Dividend

Total capital ratio

14.68% vs. min. regulatory req. of 13.5%

Leverage ratio

6.69%

vs. current min. regulatory* req. of 5.5% (under relief )

769

%

* Relief valid until December 31, 2023. The minimum regulatory requirement pre-relief is 6%.

** Calculated as the dividend per share declared in respect of the last four quarters' profits, including 2Q23, divided by share price on the record date of each distribution or declaration.

Note: For additional information regarding capital requirements, refer to note 9 in the 2Q23 report.

Dummy Text

w

17

2Q23 key takeaways

Continuous robust profitability. Net profit of NIS 1.9 billion; ROE of 15.8%; cost-income ratio of 38.1%.

High quality loan book, NPL at 0.81%;

further build of reserve, mainly of collective allowance

Fortress balance sheet with strong buffers of capital and liquidity, substantially above requirements

Responsible credit growth, in line with sector and macro dynamics; diversified growth across business economic sectors

Strong organic capital generation and buffer creation allow for 40% dividend payout ratio

2Q23 Quarterly Financial Review

Appendix

Key balance sheet items NIS million

	2Q22	1Q23	2Q23
Cash on hand and deposits with banks	162,579	95,918	97,082
Securities	81,506	137,338	132,301
Net credit to the public	371,976	394,399	400,136
Deposits from the public	529,508	528,897	529,703
Deposits from banks	9,045	9,284	10,793
Bonds and subordinated notes	27,334	26,417	24,804
Shareholders' equity	44,217	48,115	49,342
Total balance sheet	651,598	666,665	668,784

Note: For a full balance sheet analysis, please referto the bank's financialstatementsfor2Q23.

Key profit and loss items NIS million

	2Q22	1Q23	2Q23
Total net financing profit	3,168	4,377	4,709
Fees and other income	920	982	1,016
Total income	4,088	5,359	5,725
Wages	(1,068	(1,248	(1,171
	)	)	)
Maintenance and depreciation of buildings and equipment	(369	(356	(443
	)	)	)
Other expenses	(559	(490	(567
	)	)	)
Total operating and other expenses	(1,996	(2,094	(2,181
	)	)	)
Provision for credit losses	(91	(185	(579
	)	)	)
Profit before taxes	2,001	3,080	2,965
Provision for taxes on profit	(704	(1,089	(1,056
	)	)	)
Net profit	1,343	2,008	1,922
ROE	12.3	17.0	15.8
	%	%	%

For a full profit and loss analysis, please referto the bank's financialstatementsfor2Q23 .

Dummy Text

Israel's leading financial institution