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TEL AVIV, May 14 (Reuters) – Bank Hapoalim, Israel’s largest lender, said on Thursday its net profit fell sharply in the first quarter, hit by a large allowance for credit losses due to the outbreak of coronavirus.

The bank said net profit of 192 million shekels ($ 54 million), up from 821 million a year earlier and a forecast of 464 million in a Reuters poll of analysts.

Net profit was also hit by a loss of NIS 109 million from the separation of its Isracard credit card unit.

Its shares were down 1.9% in morning trading, in line with the benchmark TA-125.

The bank’s net financial income reached NIS 2.498 billion in the quarter, up from NIS 2.366 billion a year earlier.

Spending on credit losses jumped to NIS 809 million from NIS 121 million, most of it money set aside as an early measure to deal with the effects of the global coronavirus outbreak.

In the fourth quarter, Hapoalim was one of the first lenders to fund the crisis, setting aside NIS 450 million.

The bank said it has set up a committee headed by its chief executive to formulate ways to deal with the crisis.

“The committee regularly reviews various scenarios for the development of this event and its financial effects on the bank,” Hapoalim said.

The bank allows customers to suspend loan and mortgage payments to relieve cash flow and participates in a government program to provide loans to businesses. Since its inception, the bank has processed more than 9,000 loan applications, two-thirds of which have been approved.

Net credit to the public has increased by NIS 6.6 billion since the end of 2019 to reach NIS 299.5 billion.

Israeli banks entered the crisis in good shape thanks to years of conservative lending practices, Barclays analyst Tavy Rosner said.

“While we are likely to see an increase in short-term provisions, we believe that banks are able to overcome the current challenges,” he said, estimating Hapoalim’s excess capital balance at 5.8 billion. shekels.

Last month, the bank agreed to pay the U.S. government nearly $ 875 million to resolve charges it conspired with U.S. taxpayers and others to hide more than $ 7.6 billion in Swiss accounts. and Israelis.

Hapoalim, the first bank in Israel to report quarterly profits, has also agreed to pay more than $ 30 million for its role in the money laundering plot surrounding FIFA, the world’s soccer governing body.

The bank had already made arrangements for these settlements.