Mizrahi liquidating investment arm
United Mizrahi Bank announced yesterday that it plans to liquidate its investment company and merge all its operations into the bank. The board of directors has approved the move, which will involve transferring all of the investment company's assets, rights and liabilities to the bank.
Five years ago, Mizrahi decided to expand its investment company - which had previously maintained a low profile since its founding in 1962 - so as to diversify the bank's sources of profit. However, the company's belated entry into the field of high-tech investment proved a bad move.
It absorbed heavy losses, which totaled NIS 112 million over the years 2001-2003. In response to these losses, Mizrahi decided to put a freeze on all new investments at the end of 2002, and now, it has decided to shut down the company completely.
The investment company's principal holdings include 20 percent of the Mofet venture capital fund, 20 percent of the Marathon fund and 13 percent of the high-tech company Macro Printers. In the past, it invested a few million shekels in the Ishi Yashir insurance company, but it later sold its shares to another direct insurance company, Bituach Yashir.
The investment company's equity stood at NIS 77 million at the end of September 2003, meaning that following the merger, Mizrahi's equity will increase by this amount.