* Q4 net profit 713 million shekels, vs 539 million forecast
* Bad debt provisions 100 mln shekels, vs 369 mln forecast
* Plans to restart dividend
* Shares up 0.6 percent
(Adds analyst and chairman/CFO comments, share reaction)
By Tova Cohen
TEL AVIV, March 31 (Reuters) - Bank Hapoalim, Israel's second-largest bank, beat forecasts with a 53 percent jump in fourth-quarter net profit, boosted by sharply lower bad debt provisions as the economy improved.
Chairman Yair Seroussi said on Thursday a strategic plan announced at the end of 2009 led to a turnaround in profitability, capital adequacy, credit-portfolio quality, growth and market share.
Hapoalim planned to resume dividend payments during 2011, subject to approval by the Bank of Israel, he said.
Since Hapoalim ended 2008 with a loss in the wake of the global financial crisis, it has been prohibited by regulators from distributing a dividend until 2012 unless it receives approval.
Seroussi told reporters Hapoalim would approach the banking regulator after publishig first-quarter results in May with its dividend request. Hapoalim's policy had been to distribute at least half of net operating profit as a dividend each year, on a quarterly basis.
Its shares were up 0.6 percent, compared with modest losses on the broader Tel Aviv bourse.
Hapoalim reported fourth-quarter net profit of 713 million shekels ($204 million), compared with a forecast for 539 million in a Reuters poll.
Provision for doubtful debts fell to 100 million shekels from 536 million, below a forecast for 369 million.
Chief financial officer Ran Oz said Hapoalim's ratio of its specific provision to its total credit to the public was 0.5 percent in 2010. This rate could be maintained in 2011, he said.
"We returned to a normal level of bad debt provisons in 2010 ... The situation is good, the economy is good and we believe this is good level."
Israel's economy grew an annualised 7.7 percent in the fourth quarter and 4.6 percent for all of 2010.
Income from financing operations before provision for doubtful debts rose to 2.13 billion shekels from 2.01 billion.
"Even if we neutralise items that are not representative, led by the lower provisions, we still get adjusted net profit of 600 million shekels, 11 percent return on equity, following similar results in all of 2010," said Yuval Ben Zeev, head of research at brokerage Clal Finance.
He said financing income was boosted by ongoing growth in income from households. "In our estimate, Bank Hapoalim is expected to be the big winner from the rise in the central bank's interest rate, which will lead to a continued upward crawl in interest income in the coming quarters," Ben Zeev said.
The central has raised its key rate by 2.5 percentage points since August 2009. Its latest move was a 0.5 hike on Monday.
Hapoalim's capital adequacy ratio rose to 14.1 percent from 13.7 percent at the end of 2009, exceeding the minimum target set by the bank.
Leumi, Israel's biggest bank, reported lower fourth-quarter net profit of 522 million shekels and net financing income of 2.14 billion.. (Editing by Steven Scheer and Dan Lalor)