Supermarket mogul Rami Levi is partnering with the Bank of Jerusalem to offer the latter's banking services through his branches. The sides are scheduled to sign a final agreement this morning.
The partners will be starting with a pilot program. Starting Wednesday, stands offering the bank's Internet deposit services will start operating at every supermarket branch.
Once Rami Levi receives approval from the banks commissioner, full banking services will be available at his supermarkets.
The bank's shares jumped 10.5% in trading on Monday, even though the announcement about the partnership only came after the stock exchange closed.
As part of the deal, the bank is promising to offer preferential terms to customers who sign up through the discount supermarket chain - better than what other banks offer, and better than what the Bank of Jerusalem offers other customers. This may include higher interest rates on deposits, and lower interest rates on loans.
Both sides hope to gain from the partnership: The Bank of Jerusalem seeks to benefit from Levi's reputation as a consumer activist, while Levi wants to present himself as someone offering an even wider range of services at reduced prices.
Levi recently expanded into the cell phone market, and his virtual cellular operator significantly undercuts the big players. He also offers insurance at his grocery branches.
The Bank of Jerusalem has a paltry 1% of the banking market, but hopes to expand significantly over the next few years. Its main disadvantage is that it has only 16 branches. The partnership with Levi will be a significant step to jump this obstacle.
The bank recently started wooing customers by offering interest on deposits equal to 80% of the Bank of Israel's interest rate - about four times more than most banks offer. People reportedly deposited NIS 300 million at the bank since it made that offer about a month ago.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now