Bank Hapoalim B.M.

Investor Presentation • Mar 8, 2022

Annual Financial Review 2021

CEO, Dov Kotler Opening

CFO, Ram Gev Financials & strategy

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2021 2021Annual Financial Review Annual Financial Review 2

Disclaimer

This presentation includes condensed information and selected data from Bank Hapoalim's 2021 annual financial results.

This presentation is not a substitute for the Bank's 2021 Annual 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

presentation that does not refer to authorities. historical facts constitutes forward-looking Special items in ROE and net profit refer to information, as defined in the Securities provision made in relation to the Law. Forward looking statements regarding investigation of the US authorities and

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 accounting policies, as well as certain other of the Bank's private banking activities - Investor Relations/Financial Information. risk factors which are detailed from time to overseas. time in the Bank's filings with the securities Some of the information in this

the Bank's business, financial condition and related legal proceedings, the effect of the

2021 2021Annual Financial Review Annual Financial Review 4

CEO, Dov Kotler Opening

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2021- a remarkable year for Bank Hapoalim

4.9 Bn Net profit	16.8 % Total credit growth	9.2 % Total income growth
11.8 % ROE	54.2 % Cost- income ratio	10.96 % CET-1 ratio

A year of significant advancements across all business lines

In view of the high demand in the market, we identified the potential for growth in credit, expanded our capacity accordingly, and strengthened our response to customers

The growth has been reflected in increased income, We maintained portfolio quality and at a significantly higher level than just last year an adequate cushion of provisions

We developed additional revenue streams alongside We developed bit app lines of bussiness and core banking, most notably "Poalim Equity" took further steps towards its monetization

Significant capital surpluses, profitability achieved We introduced an updated code of ethics and during the year, and the Tier 2 issuance allowed us to formulated values supporting an organizational attain growth outpacing the industry, while distributing culture that promotes business growth, which are substantial dividends to shareholders embedded in our work routines

We restrained expenses and allocated our resources and employees to growth-supporting activities

Entering 2022 with proven execution capabilities

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CFO, Ram Gev

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Financials & strategy

Tight labor market and higher inflation are expected to lead to a first rate hike

Inflation is up, albeit lower than in most advanced economies

Long-term rates have increased; rate hikes are now implied

10-year government bond yield, Israel

The macroeconomic environment was supportive for the bank's balance-sheet and P&L

Strong business drive and results

Robust profitability	Significant credit growth; outpaced the market	Reversal of most of COVID-19 reserve; asset quality remained resilient	Capital management
Increase of 9.2% YoY in total income as we captured business opportunities across all segments of operations Income from credit losses due to reversal of collective provision and lower individual provision	Economic rebound and our preparedness to meet the increased demand, led to 24.8% and 23.3% growth YoY, in corporate and commercial credit, respectively Mortgages increased 16.1% YoY, supported by the all-time highs in the market	NPL ratio at pre-COVID level Problematic debt declined by 20.2%, constituting 2.7% of total credit vs. 4.0% at the end of 2020 Reserve maintained high, more than double the NPL balances Credit deferrals down to 0.4% of the book	Large capital surplus coupled with strong organic capital generation allowed enhanced credit growth Distributed NIS 1.5 Bn in respect of 2020-2021 profits USD 1 Bn Green Tier 2 issuance to support credit growth and improve capital structure
ROE	Credit to the public	LLP ratio and NPL ratio	CET-1 ratio and dividend
11.8% 9.1% 2021 4Q21	16.8% 5.2% YoY QoQ	-0.37% 0.81% 2021 December 31 provisions NPL ratio ratio	10.96% 1.5 Bn December Dividend 31 CET-1 ratio distributed during 2021

P&L highlights
	4Q20	3Q21	4Q21		2020	2021
Total net financing profit	2,492	2,777	2,680		9,885	10,848
Fees and other income	845	867	954		3,291	3,544
Total income	3,337	3,644	3,634		13,176	14,392
Operating and other expenses	1,908	1,999	1,905		7,501	7,803
Profit before provisions and taxes	1,429	1,645	1,729		5,675	6,589
Provision for credit losses	-187	-252	187		1,943	-1,220
Profit before taxes	1,616	1,897	1,542		3,732	7,809
Net profit	915	1,207	934		2,056	4,914
ROE	9.6%	11.8%	9.1%		5.3%	11.8%

Notes: 1. Excluding special items, net profitfor 1Q20 totaled NIS 313 million, net profit for 2Q20 totaled NIS 161 million, net profit for 2020 totaled NIS 2,205 million (ROE of 5.7%), net profit for 4Q21 totaled NIS 977 million (ROE of 9.5%) and net profitfor2021 totaled NIS 4,957million (ROEof 11.9%).

1. For a full profit and loss disclosure, please refer to the Bank'sfinancialstatements for 4Q21.

Robust credit growth; demonstrated ability to meet high demand

Credit

NIS billion

Total

quarterly

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NIS million

Business credit growth laid the foundation for an increase in income

Note: 2019 and 2018 corporate credit balances were reclassified in the 2020 financial report. 2017 balances were not reclassified.

Retail credit growth laid the foundation for an increase in income

Surging deposits on the back of high liquidity in the market; well positioned for rate hike

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Continued revenue momentum in core banking NIS million

Fee growth across all types; supported by increased business activity NIS million

Account management

Securities

Credit cards

Other fees

Credit handling

Financing activities

Disciplined management of operating expenses NIS million

expenses

Other expenses

Special items

Total expenses

Increase in salary expenses is attributed to a provision for performance-based bonus and a special bonus in honor of

Improved productivity reflects our focus on both income growth and cost control

Efficiency plan well on track

• Early retirement of over 900 employees by 2022
• Headcount reduction partially mitigated by growth supporting recruitments

New HQ building deal on track

• Relocation planned for late 2025
• Innovative advanced infrastructure will save operating expenses
• Promoting plans for betterment of current properties in prime locations in Tel Aviv

Asset quality remained resilient; reserve remained high despite partial reverse NIS million

Capital surplus supported the high growth and allowed dividend distribution

Dividend distributed in 2021(Aug. & Dec.)

NIS 1.5 billion

of which, NIS 862 million in respect of 2021 profits

The Board decided not to declare an additional dividend in respect of 2021 profits, in order to utilize the capital to meet the continuing high demand for credit.

Total capital ratio

% vs. Dec 31, '21 reg. req. of 12.5% 14.22 reg. req. as of Jan 1, '22 is 13.5%

Leverage ratio

% vs. current reg. req. of 5.5% 6.03 (6.0% - reg. req. pre-relief)

Note: For additional information regarding capital requirements, refer to note 9 in the 4Q21 financial report.

Corporate strategy focused Growth on three pillars banking

through innovative and fair banking for our • customers a new way •

in core

1

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
• Committed to growth Expand dealing and brokerage activity by improving the digital offering

Create to bank 2

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

3

• Build a growth- Further encourage a customer–centric and growthsupporting organizational culture
• supporting organizational Modernize core IT systems to improve time-tomarket capabilities and reduce IT costs
• infrastructure Bring cutting-edge data analytics

1

Growth in core banking

Corporate banking Mortgages Consumer credit

• • We expanded our capacity: We adapted our processes to the demand in the market and significantly shortened loan approval time
• technological platforms to achieve a leadership position: a syndication system, a factoring system and more

• We introduces new products, such as digital guarantees

• • Upgraded our IT systems
  • Recruited mortgage advisors

• • We invested in top-tier Opened call centers dedicated to sales and customer retention

  • Introduced digital mortgage applications

• We expanded and improved our communication channels through advanced features such as the Financial Partner and the Chat bot

• We launched a new customer club: "Poalim Wonder"

• We signed an agreement with "Blender" to grant consumer credit at POS

1

Increased contribution of Poalim Equity to the Bank's profitability

• The Bank's non-financial investments arm
• Fully owned by Bank Hapoalim
• Lines of business:

Investment Platform

• Direct equity investments
• Alternative investments
• Equity syndication origination

Advisory Services

• Local & cross-border investment banking (IPO/SPAC, M&A, private placements) with their US strategic partner William Blair
• Fund placements

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• Local underwriting – 27.3% holding in Poalim IBI

Contribution to the Bank's net profit 268

CPV (Competitive Power Ventures) is a leading North American electric power generation development and asset management company

Pagaya is a FinTech company that enables financial institutions to expand ex access to financial service products

Via is a leading global on-demand public mobility solutions for commuters

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2

Bit – the leading platform in Israel for payments and financial transactions

Current offering

P2P

The leading payment app in Israel with 2.7 users

active

Claims disbursements

Working with almost all insurance companies and pension funds

Bill payments

• Water bill
• Municipal tax
• Toll road

P2M (online payments) Working with:

• Over 10k merchants
• Leading PSPs (payment service providers) in Israel

Digital wallet and bitcard

One stop shop for payments

• Tap payment
• Bitcard designated non-bank loyalty club credit card

Bit's future potential

• Transaction-based loans, including POS
• Instant consumer loans and revolving credit
• FX P2P

2021 key takeaways

Net profit of NIS 4.9 billion; ROE of 11.8% Growth momentum in credit, YoY increase of 16.8%

Credit growth led to a leap forward in the income base

Improved asset quality; pre-pandemic level of indicators

CET-1 ratio of 10.96%; capital utilized to support both enhanced credit growth and NIS 1.5 billion in dividend

Significant advancement of bit; 6 potential to further develop new lines of business

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Key balance sheet items NIS million

Year ended	2020	2021
Cash on hand and deposits with banks	138,711	189,283
Securities	71,885	71,105
Net credit to the public	301,828	352,623
Deposits from the public	435,217	525,072
Deposits from banks	6,591	11,601
Bonds and subordinated notes	23,490	25,582
Shareholders' equity	39,873	42,735
Total balance sheet	539,602	638,781

Note: For a full balance sheet analysis, please refer to the Bank's financial statements for FY21.

Key profit and loss items NIS million

Year ending December 31	2020	2021
Total net financing profit	9,885	10,848
Fees and other income	3,291	3,544
Total income	13,176	14,392
Wages	(3,836)	(4,333)
Maintenance and depreciation of buildings and equipment	(1,377)	(1,333)
Other expenses	(2,229)	(2,087)
Special items	(59)	(50)
Total operating and other expenses	(7,501)	(7,803)
Provision for credit losses	(1,943)	1,220
Profit before taxes	3,732	7,809
Provision for taxes on profit	(1,590)	(2,958)
Net profit*	2,056	4,914
ROE*	5.3%	11.8%

* Excluding special items net profit totaled NIS 4,957 million (ROE of 11.9%) in 2021 and NIS 2,205 million (ROE of 5.7%) in 2020 .

Note: For a full profit and loss analysis, please refer to the Bank's financial statements for FY21.

Israel's leading financial institution

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