Bank Hapoalim warns on profits due to U.S. tax probe

TEL AVIV bank Hapoalim (POLI.TA), Israel's biggest bank, said on Thursday it'd make a further provision anticipated at $70 million for settling a U.S. tax evasion research that can have "a enormous impact" on its 1/3-area consequences.

The $70 million could be in addition to $50 million Hapoalim has already set apart for this count number, in which U.S. government are investigating whether or not it helped American customers keep away from U.S. taxes at its Swiss unit.

the provision follows a meeting Hapoalim representatives had with members of the U.S. branch of Justice (DOJ) on Sept. 30 concerning a probable agreement among the 2 facets.

The bank said the supply did no longer relate to a separate investigation being performed by using the big apple department of economic offerings.

Hapoalim has denied the allegations.

Its foremost home rival Leumi (LUMI.TA) paid $400 million in fines in overdue 2014 to settle  investigations into whether or not it helped U.S. customers evade taxes.

Barclays analyst Tavy Rosner stated the final amount Hapoalim may need to pay to the DOJ may be notably better.

Noting that this assertion may want to weigh on Hapoalim's proportion charge, Rosner said that assuming the $70 million provision is not tax-deductable, his quarterly internet profit estimate would need to be revised down to 629 million shekels ($167 million).

The U.S. investigations have weighed on Hapoalim's stocks and are the main justification for Barclays' "underweight" rating, Rosner said.

"these days’s statement indicates that the bank is now having face-to-face conversations with the U.S. government, which can pave the way for a agreement within the coming months, in our view," he said.