The great Israeli financial-services garage sale is getting underway: Over the next few years some 26 billion shekels ($6.7 billion) of credit card companies, banks, insurers and an investment house are going to be sold,

But’s it not clear who the buyers will be. Big Israeli institutional investors are barred from buying the credit card issuers or control of the banks due to the Business Concentration Law. Other rules bar crossholding between big financial groups and other large Israeli business groups. So far, no foreign investors have stepped up as potential buyers.

Chinese buyers emerged last year to makes bids for insurance companies Clal and Phoenix, but they ran up against concerns by Dorit Salinger, the head of capital markets, insurance and savings, about awarding them an insurance license.

Nevertheless, the big asset sale is on because in most cases regulatory requirements give the sellers no choice.

The latest companies to join the process are the three big credit card issuers after the government’s Strom committee finally agreed on terms for introducing more competition into consumer lending. The centerpiece of the reforms calls for Bank Leumi and Bank Hapoalim to sell at least 51% stakes in their credit card units Leumi Card and Isracard.

CAL, which is controlled by Israel Discount Bank and First International Bank of Israel, will have to sell a 20% stake, too.

In addition, control of Mizrahi Tefahot and First International Bank of Israel – the country’s No. 4 and No. 5 lenders – will be sold by the end of 2019. A block of Bank Hapoalim is up for sale as are insurers Phoenix and Clal and investment house Psagot.

Hedva Ber, supervisor of banks at the Bank of Israel, told a press conference there was already a lot of interest in buying these assets, although she declined to provide any names.

Ber stressed that neither banks nor credit card companies have to have a controlling shareholder and can be sold to public via the stock market. “From our point of view that is fine,” she said. “We have already gotten specific requests from foreign groups interested in joining the Israeli bank and credit card system.”

How much could all these financial service companies be worth? The credit card companies and the banks alone could be worth as much as 21 billion shekels, depending on how big a stake the banks sell in the card companies. Adding in the insurance companies and investment houses, the figure could reach 26 billion or more, depending on how much of a premium buyers are will to pay for control.

On other hand, the market for financial-service companies is not hot. More than 10 years ago, when the Bachar committee ordered the banks to sell their instructional investment arms, there was no shortage of buyers. That is no longer the case today, especially as Israel’s financial-service sector is in a state of flux.

By far the biggest block of stock up for sale right now, is half the 20% stake in Bank Hapoalim controlled by Shari Arison, an heiress to the Carnival Cruise fortune. For more than a year she has been seeking a buyer, mainly in the United States, in a sale that could fetch 5.5 billion shekels.

Unlike almost everyone else putting up stake in financial service companies, Arison is under no regulatory directive to sell; rather, she believes that the 9-10% return on equity Hapoalim is earning right now is likely to decline. Still, she is seeking to sell at book value even though Hapolaim shares are trading at just 79%, an amount that equals 1.5 billion shekels.

Meanwhile, the Israeli investor Zadik Bino and his Australian partners, the Liberman and Abeles families, will be selling the third of First International Bank they control, valued at 51.6 billion shekels and the Wertheim and Ofer families their 43% controlling stake in Mizrahi Tefahot. Under the terms of the Business Concentration Law, both groups have to divest by the end of 2019.

Mizrahi Tefahot is Israel’s most profitable bank thanks to its leading market share in the boom mortgage segment and the families’ stake is today worth 2.3 billion shekels. Nevertheless the Wertheims are likely to choose to keep Central Bottling Company and the real estate company Aloni Hetz over Mizrahi. Likewise the Ofers are likely to prefer the mall management company Melisron over Mizrahi, too.

IDB, which doesn’t have an insurance license any longer, is under orders to sell its 55% in Clal. After failing to sell its to a Chinese groups, Salinger has ordered the shares to be sold at tranches of 5%, a move IDB is resisting and claims now to have a buyer (see The Ticker on this page). Even as it trades at just 52% of book, Clal is worth 2.23 billion shekels.

Yitzhak Tshuva’s Delek has to sell its 52.3% of Phoenix to meet the terms of the Concentration Law, but reported efforts to sell it to the New York real estate family Kushner and to China’s Fosun International both failed. For now, Delek has no buyer.

Psagot, Israel’s biggest investment house, is not formally up for sale but is expected to be very soon. Managing 200 billion shekels and assets, it is controlled by the British buyout fund Apax. Given the volatility of the capital markets and the unfavorable regulatory environment, Apax is unlikely to fetch that high a valuation.