As Bank Leumi gears up to ax 800 jobs, its management is preparing to fly to London to celebrate the bank's 110th birthday next Monday.
The bash will take place in the old London city hall building, which was erected in 1411 and today serves as a banquet hall. The date for the event was set well in advance, but its timing is unfortunate given the cutbacks and other efficiency measures being implemented at the bank, including the cutting of 800 jobs.
Altogether Bank Leumi has nearly 11,000 employees in Israel. The entire Leumi group has about 14,000.
Bank Leumi's top management, headed by outgoing chief executive Galia Maor, has invited 300 clients to the glittering do, including so-called tycoons who are among the bank's biggest borrowers. For them, it's an opportunity to rub shoulders with Maor's successor, Rakefet Russak-Aminoach.
For the record, a spokesman for the IDB group, a pyramid of holding companies that is among Israel's heaviest borrowers, says that none of the group's people have been invited.
Earlier this month the Leumi capital markets division held its annual party at the bank's offices instead of at a hotel in order to save costs, explained division chief Dan Zidon to the workers.
The job cuts and other streamlining methods are designed to shore up the bank's profitability ahead of regulatory changes instituted by the Bank of Israel's supervisor of banks. The supervisor, David Zaken, has ordered Israel's banks to improve their capital adequacy ratios - the higher the ratio, the more stable a bank is (in the case of untoward economic events ) and the better depositors are protected. But the more capital a bank is made to set aside and hold down, the less it has to "play" with and the more profit stands to suffer.
Earlier this month, therefore, Leumi announced broad efficiency measures including the cutting of 800 jobs, but by attrition not dismissals, meaning that when a worker quits or retires the position will not be refilled.
Another efficiency measure is moving 600 workers from jobs in central Israel to outlying areas. Leumi wants to cut back rent in the center, where leasing costs are higher.
For the third quarter of 2011, Leumi reported a 74% year over year drop in profit to NIS 155 million.
