Bank Hapoalim B.M.

Quarterly Report • Nov 15, 2021

3Q21 Quarterly Financial Review

Disclaimer

This presentation includes condensed information and selected data on Bank Hapoalim's 2021 third-quarter results.

This presentation is not a substitute for the Bank's Third Quarter 2021 Financial Statements, which contain 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 Securities Law. Forward-looking statements concerning 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, statements on the subjects of 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 which are detailed from time to time in the Bank's filings with the securities authorities.

Special items in ROE and net profit in previous refer to provisions made in relation to the investigations of the US authorities, the effect of the dosure of the Banking activities overseas, loss/profit from the separation from lsracard, and loss from impairment relating to Bank Pozitif. Special items in expenses refer to provisions made in relation to the investigations of the US authorities (including exchange rate differentials), and the effect of the Bank's private banking activities overseas.

The rebound in growth continues; rate hikes are now implied in the markets

Unemployment declined, though levels are still high compared to the pre-Covid period

Inflation is rising, yet not a concern from the BOI's perspective cp, year-on-year rate of change

The budget deficit fell due to fast growth and the end of

fiscal aid plans Budget deficit, trailing 12 months sum, % of GDP

Markets expect rate hikes next year implied Bol rate

Source: CBS

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Source: CBS

Key messages for the quarter

Strong reported net profit

• Total income growth of 10.4% YoY, supported by credit growth, fees and CPI
• Income from credit losses due to recovery of individual provision and lower than previous quarters' reversal of collective provision

Income momentum driven by continuous credit growth

• · Corporate and commercial credit grew 15.1% and 17.2% YTD, respectively
• Mortqages increased 10.9% YTD, supported by the new highs in the market

Improved credit environment; NPL ratio at pre-COVID level

• COVID-19 deferrals dropped to 0.7% of credit; still low loan loss provisions
• Reserve maintained high, more than double the NPL balances

Capital surplus allowed dividend distribution

• Distribution of 30% of 3Q21 net profit coupled with a dividend in respect of 1H21 profits, followed by a distribution of 30% of 2020 net profit, made in August.
• "Green" Tier 2 issuance to support credit growth and improve capital structure

Rigorous execution of our strategy

• Continued business momentum supported by healthy underwriting and transaction pipelines
• · Poalim Equity further increase in investment portfolio; contributed NIS 268 m to 9M21 net profit

ROE 11.8% 13.1% Credit to the public growth 3.6% 14.5% LLP ratio and NPL ratio 0.82%

CET-1 ratio and growth

9.2%

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P&I
highlights	3020	2Q21	3Q21	9M20	9M21
Total net financing profit	2,536	2,709	2,777	7,393	8,168
Fees and other income	766	824	867	2,446	2,590
Total income	3,302	3,533	3,644	9,839	10,758
Operating and other expenses	1,851	1,980	1,999	5,593	5,898
Profit before provisions and taxes	1,451	1,553	1,645	4,246	4,860
Provision for credit losses	193	-647	-252	2,130	-1,40
Profit before taxes	1,258	2,200	1,897	2,116	6,267
Net profit*	816	1,419	1,207	1,141	5,980
ROE*	8.8%	14.5%	11.8%	4.0%	13.1%

* Excluding special items, net profit for 9M20 totaled NIS 1,290 million (ROE of 4.5%).

Note: For a full profit and loss disclosure, please referto the Bank's financialstatementsfor 3Q21.

Strong credit growth momentum Net, NIS billion

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6

Widespread growth translated into income growth

Credit balances NIS billion

Total

income

NIS million

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4.3%

15.1%
YTD

9.1%

QOQ

3Q21

3Q21

Widespread growth translated into income growth

8

Deposits continue to grow, crossing half a trillion shekels

Of total deposits: 45%

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Continued revenue momentum in core banking

NIS million

3Q21

Fee growth reflects recovering business activity NIS million

Disciplined management of operating expenses NIS million

3Q21 cost income ratio 54.9%

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

13

Further decline in deferrals and NPL balances

Another quarter of income from credit losses; reserve remains relatively high

NIS million

15

Capital surplus allowed dividend distribution

* Dividend paid in August 2021, in the amount of NIS 617 m.

** The cash dividend will be paid on December 8, 2021.

Note: For additional information regarding capital requirements, refer to note 9 in the 3Q21 financial report.

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

Tier 2 issuance of USD 1 billion to support future growth

An impressive inaugural size with 2.6x oversubscription at launch

International private offering for institutional investors

Rated BBB by S&P and Fitch

1180 Rationale

Support future growth

Improve capital structure

Diversify investor base

Strengthen our commitment to ESG and promote sustainable financing

First ever "green" issuance out of Israel

An amount equivalent to the net proceeds will be allocated to finance eligible green projects

The Bank will establish a "Green Bond Committee" to oversee, monitor and manage the allocation process

0 0

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3Q21 key takeaways

ROE of 11.8% in 3Q21, 13.1% in 9M21

Strong credit growth momentum, YoY increase of 14.5%

Credit growth translated into an increase in income

3

Continued improvement in asset quality; reserve remains relatively high

Continued strategy execution; Tier 2 issuance to support future growth

Appendix

	3Q20	2Q21	3021
Cash on hand and deposits with banks	128,421	170,439	175,765
Securities	67,835	69,910	70,383
Net credit to the public	292,845	323,757	335,297
Deposits from the public	417,005	483,090	505,483
Deposits from banks	3,280	10,110	10,448
Bonds and subordinated notes	24,724	20,944	18,761
Shareholders' equity	38,971	42,314	42,717
Total balance sheet	515,686	586,544	604,324

Israel's leading financial institution