Bank Hapoalim B.M.

Investor Presentation • Aug 16, 2021

2Q21

Quarterly Financial Review

Disclaimer

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

This presentation is not a substitute for the Bank's Second Quarter 2021 Financial Statements, which contain the full financial information, including 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 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 Banks 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 tems in ROE and net profit in previous periods, refer to provisions made in relation to the US authorities, the effect of the closure of the Banking activities overseas, loss/profit from the separation from Isracard, 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 Israeli economy is back on track

Stronger than expected rebound

• ◆ Rebound in economic activity in Q2
• ◆ The fiscal stance has improved against the backdrop of high tax receipts
• ◆ High demand for labor yet to fully affect unemployment rate
• ◆ Higher inflation will not change the scope of the monetary policy
• ◆ Coronavirus case numbers rising, with limited economic restrictions so far

Gradual decline in unemployment rate

The fiscal stance has improved

Budget deficit, trailing 12 months sum, % of GDP

Inflation is rising, yet no change to monetary policy

CPI, year-on-year rate of change

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Key messages for the quarter

Strong reported net income

• Core financing income growth of 8.6% QoQ, supported by volume growth and CP
• Reversal of collective provisions and an increase in the volume of recovery

Robust credit growth momentum across all segments

• · Corporate and commercial grew 14.4% and 16.1% YoY, respectively
• Mortgages increased 11.8% YoY, supported by the new highs in the market

Continued positive credit quality trends

• Low problematic debt, low deferrals, low levels of current loan loss provisions
• Reserve maintained high, even after a decline in the quarter

Large capital buffers allow for dividend distribution

• NIS 617 million to be distributed to shareholders in respect of 2020 net profit
• High capacity to further support growth and capital distribution

Rigorous execution of our strategy

• Our focus on credit growth led to a material increase of the loan book
• · "Poalim Center" acquisition of a property in Tel-Aviv to centralize head office in the future

Credit to the public growth 5.8%

ROE

14.5%

10.2%

10.8% cET-1 ca

14.1%

LLP ratio and NPL ratio 0.85% NPL rati

CET-1 ratio and growth

Strong profitability in the quarter NIS million

P&L highlights

	2Q20	1Q21	2Q21	1H20	1121
Total net financing profit	2,359	2,682	2,709	4,857	5,391
Fees and other income	795	899	824	1,680	1,723
Total income	3,154	3,581	3,533	6,537	7,114
Operating and other expenses	1,826	1,919	1,980	3,742	3,899
Profit before provisions and taxes	1,328	1,662	1,553	2,795	3,215
Provision for credit osses	1,128	-508	-647	1,937	-1,155
Profit before taxes	200	2,170	2,200	858	4,5/0
Net profit*	133	1,354	1,419	325	2,773
ROE*	1.4%	14.2%	14.5%	1.7%	14.1%

* Excluding special items, net profit for 2Q20 totaled NIS 161 million (ROE of 1.7%). Net profit for 1H20 totaled NIS 474 million (ROE of 2.5%).

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Continued broad-based credit growth

· Net, NIS billion

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Business momentum enhanced in the quarter across all segments Net, NIS billion

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Deposits continue to grow; LCR well above target

Core banking income growth supported by volume & CPI

Disciplined management of operating expenses NIS million

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Asset quality indicators close to pre-pandemic level

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2Q21

Income from credit losses due to reversal of collective provisions and recovery of individuals; reserve remains high NIS million

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High capital surplus allows dividend distribution NIS billion

* The cash dividend will be paid on August 18, 2021.

Note: For additional information regarding capital requirements, refer to note 9 in the 2021 financial report.

We continue to deliver on our strategy

Growth in core banking

The Bank will work to grow the volume of its activity with retail, commercial, and corporate banking customers

Our vision: Committed to growth through innovative and fair banking for our customers

Build a growth-supporting organizational infrastructure

The Bank will implement processes encouraging a customer-centric, growth-supporting organizational culture, enabling it to improve its delivery and time to market

Create a new way to bank

The Bank will introduce new digital distribution channels, services and products

2Q21

Strongest brands in the sector

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2Q21 key takeaways

ROE of 14.5% in 2Q21

Broad-based loan growth bringing YoY increase of 10.2%

Strong core banking income

3

Credit quality indicators close to pre-pandemic levels; reserve remains high

Significant buffer allows for capital distribution, first to declare a dividend payment in respect of 2020 net profit

Appendix

	2Q20	4Q20	2021
Cash on hand and deposits with banks	113,033	138,711	170,439
Securities	66,513	71,885	69,910
Net credit to the public	293,700	301,828	323,757
Deposits from the public	400,816	435,217	483,090
Deposits from banks	3,418	6,591	10,110
Bonds and subordinated notes	25,196	23,490	20,944
Shareholders' equity	38,024	39,873	42,314
Total balance sheet	499,280	539,602	586,344

Israel's leading financial institution