TEL AVIV, March 24 Bank Hapoalim,
Israel's largest bank, on Thursday said it would take $68.5
million in provisions for U.S. tax evasion investigations in the
fourth quarter and earnings would suffer as a result.
This would be in addition to $120 million Hapoalim has
already set aside for this matter, in which U.S. authorities are
investigating whether it helped American clients evade U.S.
taxes at its Swiss unit.
"These events will lead to a significant reduction in the
profit the bank will record in the fourth quarter of 2016,"
Hapoalim warned in a statement to the Tel Aviv Stock Exchange.
The bank set aside $25 million to cover a potential
settlement of the U.S. Department of Justice investigation.
In addition, it said it was instructed by the Bank of Israel
to set aside a provision related to a separate investigation
being carried out by the New York Department of Financial
Services. Accordingly, it said it would set aside an additional
$43.5 million in the fourth quarter.
Hapoalim has denied the allegations.
The bank said it would make a loan loss provision of 470
million shekels in the fourth quarter but did not provide
details. In addition, it will pay 157 million shekels in an
accounting measure related to a decrease in corporate taxes that
will affect the entire banking sector.
Hapoalim's main domestic rival Leumi paid $400
million in fines in late 2014 to settle two investigations into
whether it helped U.S. clients evade taxes.
Hapoalim will report fourth quarter results on March 30.
(Reporting by Tova Cohen; Editing by Cynthia Osterman)