Bank Hapoalim B.M.

Investor Presentation • Aug 15, 2022

Quarterly Financial Review

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2Q22 Quarterly Financial Review

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Disclaimer

This presentation includes condensed information and selected data from Bank Hapoalim's second-quarter 2022 financial results.

This presentation is not a substitute for the Bank's second-quarter Financial Statements, which include the full financial information, including forward-looking information. The financial statements are available on the Bank's website at www

presentation authorities. that does not refer to historical facts constitutes forward-looking Special items in ROE and net profit refer to

Law. Forward looking statements regarding investigation of the US authorities and the Bank's business, financial condition and related legal proceedings, the effect of the results of operations, are subject to risks closure of the Bank's private-banking and uncertainties that may cause actual activities overseas, loss/profit from the results to differ materially from those separation from Isracard, and loss from contemplated. Such forward looking impairment relating to Bank Pozitif. Special statements, include, but are not limited to, items in expenses refer to provisions made product demand, pricing, market in relation to the investigation of the US acceptance, changing economic authorities (including exchange rate conditions, risks in product and technology differentials) and related legal development and the effect of the Bank's proceedings, and the effect of the closure .bankhapoalim.com - Investor accounting policies, as well as certain other of the Bank's private-banking activities Relations/Financial Information. risk factors detailed from time to time in overseas. Some of the Bank's filings with the securities the information in this

information, as defined in the Securities provisions made in relation to the

Bank Hapoalim reports another strong quarter

Rigorous strategy implementation leading to another double-digit quarterly ROE

• o 15.7% increase in total income (YoY)
• o Cost-income ratio dropped to 48.8%

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Responsible credit growth aligned with current macroeconomic uncertainties

o Focus on risk and pricing o Continually strong credit quality

Solid capital position; dividend distribution resumption

• o High organic capital generation
• o Reduced market volatility impact on capital

Favorably positioned to benefit from the new interest rate environment

• o Largest retail deposit base in the sector
• o 44% of deposits are non-interest bearing

% 2.5 Market expectation for BOI interest rate*

Interest rate sensitivity** NIS1.2 Bn

Net profit ROE 2Q22 1H22 2Q22 1H22

NPL ratio 0.87%

CET-1 % capital ratio 11.14

Quarterly 30% dividend payout ratio

* Market implied for a 12-month horizon, as of August 12, 2022

** The effect of a parallel 1% increase in interest rates on financing income

Early signs of lower growth on the backdrop of inflation and tighter monetary policy

Inflation is up, albeit lower than in most advanced economies

Markets expect rates to peak in the 12-month horizon

CPI, year-on-year rate of change

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Strong fundamentals provide a cushion to the economy and the bank

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Source: CBS Source: MOF

Source: BNHP economics department calculations

Strong execution of our strategy led to continued profit momentum in 2Q22 NIS million

Strong execution of our strategy led to continued profit momentum in 1H22 NIS million

Responsible credit growth; in line with macroeconomic uncertainties

Responsible credit growth; pace in-line with macro uncertainties

NIS billion

Consumer

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2Q21 3Q21 4Q21 1Q22 2Q22

Mortgages

Small business

Strong retail deposit base; high sensitivity to rate hikes

Accelerated revenue growth in core banking; significant earnings upside NIS million

Fees continue to grow; benefitting from the positive * trend and Isracard agreement NIS million

Impact of the bank's renewed agreement with Isracard for the

* On July 18, the bank reached in principle agreements with Isracard, for a period of 8 years starting April 1, 2022, for the issuance and operation of bank credit cards. The agreement (if and when signed) will increase the bank's revenues from credit cards by approximately NIS 50 million on average per quarter (before tax, based on the volume of activity in 2021).

Continuous cost discipline and efficiency improvement; substantial positive jaws NIS million

Credit quality remains strong with low NPLs; healthy provisions and sufficient allowance NIS million

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

Resilient capital position due to sound management, allows organic capital growth, targeted credit growth and dividend resumption

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

Note: For additional information regarding capital requirements, refer to note 9 in the 2Q22 financial report.

Dividend distribution

the board of directors resolved to resume a trajectory of ongoing dividend distribution, while continuing to maintain balanced growth.

Corporate strategy focused on three pillars

Committed to growth through innovative and fair banking for our customers

Growth in core banking

Retail banking

• Increase digital direct sales through advanced analytical tools
• Further adapt retail network to enhance sales capabilities and advisory services
• Expand market share in mortgages

Commercial and corporate banking

• Strengthen relationship and extend activity with clients
• Expand dealing and brokerage activity by improving the digital offering

Create a new way to bank

• • Acquire new customers in the digital arena using the "bit" application platform
• organizational culture • Modernize core IT systems to Solidify leading positions in the payment market by expanding the range of payment solutions offered through "bit" and expanding collaborations with ecommerce partners
• Leverage the open-banking infrastructure to create new revenue sources

Build a growthsupporting organizational infrastructure

• Further encourage a customer– centric and growth-supporting
• improve time-to-market capabilities and reduce IT costs
• Bring cutting-edge data analytics

key takeaways

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Double-digit ROE in the quarter and first half; high positive jaws

2 3 Robust income growth, driven by the continuous growth in activity, boosted by rates increase and higher

CPI

Responsible credit growth, in line with recent macroeconomic developments

4 5 6 High organic capital generation; Dividend distribution resumption

High asset quality maintained; still very low level of provisions

Balance sheet structure supports significant upside

Key balance sheet items NIS million

	2Q21	1Q22
Cash on hand and deposits with banks	170,439	178,317	162,579
Securities	69,910	68,604	81,506
Net credit to the public	323,757	364,257	371,976
Deposits from the public	483,090	519,776	529,508
Deposits from banks	10,110	11,370	9,045
Bonds and subordinated notes	20,944	27,411	27,334
Shareholders' equity	42,314	43,230	44,217
Total balance sheet	586,344	637,625	651,598

Note: For a full balance sheet analysis, please refer to the bank's financial statements for 2Q22.

Key profit and loss items NIS million

	2Q21	1Q22
Total net financing profit	2,709	2,864	3,168
Fees and other income	824	984	920
Total income	3,533	3,848	4,088
Wages	(1,165)	(1,161)	(1,068)
Maintenance and depreciation of buildings and equipment	(316)	(326)	(369)
Other expenses	(499)	(471)	(559)
Total operating and other expenses	(1,980)	(1,958)	(1,996)
Profit before provision and taxes	1,553	1,890	2,092
Provision for credit losses	647	600	(91)
Profit before taxes	2,200	2,490	2,001
Provision for taxes on profit	(803)	(862)	(704)
Net profit	1,419	1,654	1,343
ROE	13.8%	15.6%	12.3%

Note: For a full profit and loss analysis, please referto the bank's financialstatementsfor2Q22.

2Q22 Quarterly Financial Review 21