The Association of Banks in Israel About Us

2014
The Association of Banks in Israel
About Us
The Association of Banks in Israel was founded in 1959 as an overseeing
organization for all commercial, mortgage and investment banks. Established by
members of the banking sector, the association's goal is to promote effective
dialogue with legislative branches, as well as public and private institutions,
regarding all matters of banking. Its members include the Israeli Bank Groups,
independent banks and foreign banks operating in Israel. Following the merging
and acquisition of banking institutions, the official list of association members
was revised and to date it is comprised of a total of 18 banks, including three
foreign banks operating in Israel (Citibank, HSBC and Barclays).
Operating as non-profit organization, the association's key objective
is to assist in the promotion of banking matters. Activities focus upon
regulatory and economic areas as well as legal representation in dealing
with government agencies, the Knesset, the Bank of Israel, the Stock
Exchange Authority, the Anti-trust Authority and others. In addition, the
association provides consumer education through the distribution of
relevant information and conducts routine research projects on various
banking issues. Representation is also offered to the banking sector in
matters related to the Presidium of Israeli Business Organizations.
Activities in the field of regulations are related to the various types of
governmental statutes and directives that affect the banking system, such
as proposed laws, statutes, ordinances, court orders and other regulations
with implications on banking operations. The association represents
banking positions on a variety of subjects, initiates activities related to
these areas and also conducts legal hearings on matters that are relevant
to the operations of the banking system.
Along with its involvement in legislative and regulatory matters, the
association also presents the positions of the banking sector to the media
and to public opinion factors, as well as informing the public. Among
other avenues, information is channeled by means of the association's
website with its routine updates regarding pertinent matters related to
banking in Israel. The association's two publications also contribute to the
public's knowledge and awareness of the banking scene: "The Banking
Quarterly", dealing with the research and analysis of various economic
issues related to financial markets, and "Banking", focusing on pertinent
issues from the world of banking and capital markets. The "Banking"
magazine is intended for government and regulatory executives as well
as for the heads of the banking and business community. In addition, the
association organizes congresses and conferences dealing with banking
and capital markets.
Research activities conducted by the association include economic opinions,
analysis of banking trends, international comparisons and more.
Among its many activities, the association also represents the Israeli
Banking System in dealing with relevant institutions abroad by maintaining
contacts with foreign banking associations as well as with regulatory
institutions.
The Association of Banks in Israel believes that the promotion of the
banking sector's interests eventually contributes to the entire population
of consumers of banking services in Israel. By its very nature, the activity
of the Association of Banks in Israel focuses on non-business matters
common to the whole banking sector. Business activity is, of course, dealt
with separately by each bank.
The General Assembly, comprised of representatives from each of the
member banks, serves as the association's highest institution. As a rule,
the General Assembly meets once a year, although certain situations can
necessitate the calling of a special meeting. Activities are outlined by
the Executive Committee, a forum comprised of the Heads of most of the
member banks.
The professional staff of the association operates within a framework of three
departments of expertise that coordinate the main areas of activities: The
Legal Consultation, Regulatory and Legislative Department; The Research
Department; and the External Affairs and Public Relations Department.
The Management
Mr. David Brodet – Chairman of Bank Leumi Le-Israel, President of the
Association of Banks in Israel
Born in 1944; has a BA in Economics and Political Science and an MA in
Economics, both from the Hebrew University of Jerusalem. Held various
key positions in the public sector, as well as in business and the capital
market, including VP Finance of Israel Aircraft Industries, Budgets Director
and Director-General in the Ministry of Finance, Chairman of the Board
of Directors of Mizrahi Bank and Tefahot Bank and Chairman of Karnit
Government Insurance Corporation. Serves as Chairman of the Board of
Bank Leumi since August 2010.
Smadar Barber-Tsadik – CEO of the First International Bank of Israel,
Substituting President of the Association of Banks in Israel
Born in 1963; received her Masters Degree (MBA) from The Hebrew
University of Jerusalem, majoring in Economics and Accounting. Among
her former positions: Head of Business division and Deputy CEO of First
International Bank of Israel, CEO at FIBI Holdings, FIBI Investment House
and Sahar developments and Holdings, chairman of the Board of FIBI
Bank (U.K.), Director of the Paz Oil Company. Serves as CEO of the First
International Bank of Israel since March 2007.
Moshe Pearl – CEO of the Association of Banks in Israel
Born in 1960; received his Masters Degree from the Tel Aviv University
School of Business Management. Among his former positions: the
Economic Editor of the daily newspaper "Ma'ariv", editor and broadcaster
of the program "Economic Plan" on the Israeli Army Radio Station and
economic commentator for Israeli TV Channel 10. He is currently a member
of the friends of Tel-Aviv University Association and is the author of the
bestseller "With Opened Eyes", Keter Publishing.
The Israeli Economy
2013 Data
Gross Domestic Product: NIS 1,053 Billion
Rate of Growth: 3.3%
Product Per Capita: NIS 131 Thousand
Current Account: 2.4% of National Income
Gross Public Debt: 67.4% of Domestic Product
Unemployment Rate: 6.2%
Inflation Rate: 1.8%
In 2013, GDP grew by 3.3 percent in Israel, similar to last year, a rate higher
than the average in OECD countries. The commencement of production of
natural gas from the "Tamar" field during the year contributed to growth and
is an important milestone in exploiting the natural resource found off the
Israeli shore in 2009. After deducting the contribution of the gas, the growth
rate moderates to some 2.5 percent only and reflects some slowdown
relative to last year. The moderation in the growth rate is a continuation of
the trend last year, and is primarily due to the slowdown in demand from
abroad. From a real perspective this slowdown is expressed mainly by the
stability of exports and investments, while nominally it is reflected by a low
inflation environment. Nevertheless, developments in the economy in 2013
continued to be positive relative to developed countries. GDP per capita
continued to grow, the public debt has decreased and the unemployment
rate remained low and continued the trend of contraction. Current account
surplus increased and stood at 2.4 percent of National Income, after in 2012
it was only 0.3 percent of National Income. After deducting the contribution
of gas production to the current account, the current account still shows a
surplus. Per capita GDP grew in 2013 by 1.4 percent, a growth rate higher
than the OECD average, as in recent years.
Inflation in the Israeli economy amounted in 2013 to 1.8 percent, and is
close to the midpoint of the target range for the stability of prices, which
stands since 2003 at 1 to 3 percent. Over the past two years, inflation
was between the midpoint of the target range and the lower part; this
development stands out against the backdrop of expansionary monetary
policy, and it reflects the weakness of domestic demand and the decline in
commodity prices abroad.
In light of the moderation in demand, and in the absence of inflationary
pressures, monetary policy in Israel continued to be expansionary in 2013
and to focus on supporting activity and maintaining financial stability.
During the year, the Monetary Committee reduced the interest rate from
1.75 percent to 1 percent, and thus continued the line taken since the end
of 2011, against the backdrop of expansionary monetary policy worldwide.
In April 2013, the Bank of Israel resumed its activities in the forex market,
after not being involved in it in 2012, in order to mitigate the pressures for
strengthening the shekel. During the year the effective nominal exchange
rate appreciated by 6.7 percent.
Fiscal policy this year was faced with the need to reduce the deficit, after
its rapid expansion last year. After the elections, and in the framework of
formulating the budget for 2013-2014, the government decided to reduce
the deficit by raising taxes and cutting plans for expanding expenditure. The
overall government deficit in 2013 amounted to 3.2 percent of GDP, below
the target set in the budget and lower by 0.7 percent of GDP than the deficit
in 2012. The deficit, after deducting turnover, adjusted to international
definitions, narrowed in 2013 to 4.6 percent of GDP, but its level is still
high relative to the average in OECD countries. The ratio of public debt to
GDP continued to decline in 2013, reaching a level of 67.4 percent of GDP,
significantly lower than the average debt ratio among OECD countries.
During 2013, the tense security situation in Israel decreased somewhat.
This development, in addition to keeping the current account in surplus,
reduced the default risk premium on external debt. This is reflected well
in the 5-year CDS spread between Israel and the U.S., which fell from 138
basis points in December 2012 to 104 basis points in December 2013.
In the last decade, there has been a downward trend in the unemployment
rate in the Israeli economy, together with an increase in the rate of
participation in the labor force and in employment. The number of persons
employed rose in 2013 by 2.9 percent, the participation rate continued its
upward trend of recent years reaching 63.8 percent, and the unemployment
rate fell from 6.9 percent in 2012 to 6.2 percent in 2013. This rate is lower
than the average rate of unemployment in the OECD countries, which
stood in 2013 at 8 percent. The increase in the educational level of the
population has improved the correlation between the skills of job seekers
and the demands of job vacancies, and has contributed to the decline in
unemployment.
Israeli banks have so far displayed resilience to the effects of the European
debt crisis, relative to financial institutions abroad. The resilience
displayed is associated with their relatively favorable condition, as the
impact in Israel of the global crisis in 2008 was relatively small, and the
recovery from it was faster. In 2013, the banking system continued to
maintain its strength and stability and report satisfactory business results.
In recent years, the banking system has undergone a process designed
to strengthen capital adequacy, scope and quality, in accordance with
the recommendations of the Basel Committee for banking. This is similar
to the way it is being promoted by banking systems in other countries,
within the framework of implementation of lessons learned from the
global financial crisis. The improvement in capital ratios, along with other
regulatory measures taken during the period, further strengthens the
resilience of the banks in Israel.
The Banking System in Israel
The Banks Operating in Israel
The Israeli Banking Groups & Corporations
The Bank Hapoalim Group
Bank Hapoalim
The Bank Leumi Group
Bank Leumi Le-Israel, Arab Israel Bank
The Discount Bank Group
Israel Discount Bank, Mercantile Discount Bank
The Bank Mizrahi Tefahot Group
Mizrahi Tefahot Bank, Bank Yahav
The First International Bank of Israel Group
First International Bank of Israel, Bank Otsar Ha-Hayal, Bank Poaley Agudat Israel, U-Bank, Bank Massad
The Union Bank of Israel Group
Union Bank of Israel
The Bank of Jerusalem Group
Bank of Jerusalem
The Dexia Israel Bank Group
Dexia Israel Bank
Foreign Banks operating in Israel
Citibank N.A., HSBC Bank PLC, Barclays Bank PLC, State Bank of India1
1. Not a member of the Association of Banks in Israel.
The Division of the Israeli Banking System According to the
Volume of Assets December 31, 2013
General Data about the Banking System in Israel
(2013 data)
• 1,297 branches
28.7%
15.1%
• 3,879 automatic machines for the public (including ATMs for withdrawing
cash and automatic information stations, excluding machines of nonbank corporations)
• Around 49,000 jobs
13.6%
8.4%
28.3%
1.2% The Foreign Banks
3.0%
1.0%
0.7%
• 124 banking offices abroad (the five large banking groups, including
branches and head offices)
Financial Data about the Banking System
Total of All Assets2
Credit to the Public2
1,400,000
1,235,254
1,280,888
1,307,641
1,000,000
900,000
1,200,000
839,202
856,942
866,149
2012
2013
800,000
1,000,000
700,000
600,000
800,000
500,000
600,000
400,000
300,000
400,000
200,000
200,000
100,000
0
2011
2012
0
2013
2011
2. Data listed in millions of NIS. Total of banks and their subsidiaries (only Israeli corporations). Consolidated Basis.
Deposits of the Public2
Equity2
1,200,000
100,000
89,872
90,000
1,000,000
933,273
969,485
84,044
987,926
80,000
76,071
70,000
800,000
60,000
600,000
50,000
40,000
400,000
30,000
20,000
200,000
10,000
0
0
2011
2012
2013
2. Data listed in millions of NIS. Total of banks and their subsidiaries (only Israeli corporations). Consolidated Basis.
2011
2012
2013
Net Profit2
The Banks’ Share in Giving Credit
At the end of 2013, the total amount of credit given to the Israeli economy
by the financial sector and residents living abroad reached a sum of NIS
1,659 billion, of which NIS 835 billion were given by the banks (50.3%).
8,000
7,253
7,268
7,000
The Percentage of Credit Given by Banks3
6,159
60%
6,000
5,000
55%
51.9%
4,000
51.4%
51.4%
50.1%
50.4%
50.3%
2012
2013
50%
3,000
2,000
45%
1,000
40%
0
2011
2012
2013
2. Data listed in millions of NIS. Total of banks and their subsidiaries (only Israeli corporations). Consolidated Basis.
The Percentage of Bank Deposits
out of Total Public Assets4
2008
2009
2010
2011
3. The percentage of credit given by banks out of the total amount of credit given to the Israeli economy
by the financial sector and residents living abroad.
The Division of Public Assets 2013
40%
Cash and Deposits
35%
Bonds and Treasury
Bills in Israel
32.0%
30.8%
30.2%
30%
28.1%
Other Assets 3.1%
26.8%
Israeli Residents'
Investments Abroad
25%
20%
2010
2011
35.6%
2012
2013
4. The public includes households and firms, and excludes the government, the Bank of Israel, nonresidents' investments and commercial banks. Bank deposits include savings plans.
12.5%
16.8%
Shares in Israel
Israeli Banks – Primary Financial Data5
Bank Hapoalim
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Bank Leumi Le-Israel Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
5. Data listed in millions of NIS. Consolidated Basis.
https://www.bankhapoalim.co.il
2012
2013
376,388
380,246
253,268
255,543
271,411
276,525
27,057
29,310
15.68
15.57
10.1
9.3
Israel Discount Bank http://www.leumi.co.il
2012
2013
376,160
374,360
245,378
244,757
289,538
286,003
25,228
26,765
14.87
14.82
3.8
7.6
Mizrahi Tefahot Bank
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
http://discountbank.co.il
2012
2013
201,012
200,507
119,696
117,993
151,935
148,928
12,134
12,538
14.3
14.4
7.1
7.3
https://www.mizrahi-tefahot.co.il
2012
2013
162,242
179,613
130,244
139,880
128,081
141,244
9,252
10,335
13.35
13.04
13.1
11.5
First International Bank of Israel Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Union Bank of Israel Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Mercantile Discount Bank Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Dexia Israel Bank
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
U-bank Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Arab Israel Bank
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
http://www.fibi.co.il
2012
2013
105,685
111,103
68,715
69,533
84,365
89,122
6,772
7,120
14.94
14.96
9.5
8.6
Bank Yahav
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
http://www.unionbank.co.il
2012
2013
38,825
39,490
23,858
22,420
30,890
30,622
2,191
2,335
14.94
16.19
6.2
6.2
Bank Otsar Ha-Hayal
http://www.mercantile.co.il
2012
2013
26,534
28,446
16,966
18,157
22,254
23,964
1,889
1,931
15.0
14.6
10.8
9.7
Bank of Jerusalem https://www.dexia-israel.co.il
2012
2013
8,284
8,910
6,110
6,287
3,451
4,411
716
772
28.08
31.07
10.0
8.5
http://www.u-bank.net
2012
2013
7,752
8,379
2,141
2,083
6,533
7,415
439
417
19.8
19.3
11.3
9.5
http://www.aibank.co.il
2012
2013
6,104
6,869
4,147
4,640
4,345
4,593
527
553
14.76
12.50
21.8
21.2
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Bank Massad
Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
Bank Poaley Agudat Israel Total Assets
Credit to the Public
Deposits of the Public
Equity
Capital Adequacy Ratio (%)
Return on Equity (%)
https://www.bank-yahav.co.il
2012
2013
18,367
19,327
6,153
6,685
15,692
16,455
881
965
14.22
15.03
12.2
9.5
http://www.bankotsar.co.il
2012
2013
16,431
16,364
11,476
11,524
12,762
12,558
1,036
1,103
13.74
14.71
11.12
9.65
http://www.bankjerusalem.co.il
2012
2013
12,292
13,412
9,672
9,736
9,814
11,071
694
697
14.4
13.9
5.4
2.5
http://www.bankmassad.co.il
2012
2013
5,123
5,131
2,809
2,944
4,183
4,152
427
465
14.78
15.61
11.2
9.6
http://www.pagi.co.il
2012
2013
3,770
3,602
2,167
2,246
3,003
2,811
332
355
16.3
17.4
13.8
11.1
Contact Details
The Association of Banks in Israel
39 Montefiore St., Tel Aviv 6520108 Israel
Phone: 972-3-6215700, Fax: 972-3-5660317
E-mail: [email protected]
Website: www.ibank.org.il
The Association Of Banks In Israel
39 Montefiore st. Tel-Aviv 6520108
P.O.B 2258 Tel-Aviv 6102102
Tel: 972-3–6215700
Fax: 972-3–5660317
www.ibank.org.il
[email protected]