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The death of Amiram Sivan, former chair of Bank Hapoalim's board of management, surprised many of his associates, although they knew he was not in the peak of health. In recent weeks he had spoken to several of them and even made plans to meet after the Jewish holidays. He didn't feel well a few days before the New Year and was hospitalized, speaking with friends from his hospital bed.

But a weak immune system got the better of him and Thursday evening, a day before the Rosh Hashanah holiday, Sivan died. He leaves a wife, Aliza, and three children. He will be interred at 3:30 P.M. today at the Kiryat Shaul cemetery.

Until April 2002, when he retired from his position at Bank Hapoalim, Sivan had been considered Israel's most senior banker for the past two decades. He is credited with the bank's successful rehabilitation and with transforming it into Israel's leading, and most profitable, bank. For the past year and half, Sivan had tried to raise financing for a new investment fund, but the economic crisis and the general drop in the investment mood stood in his way.

Sivan, born in 1938, had a long career in the public sector, starting as a Finance Ministry official in the early 1960s. He worked his way up the treasury ladder and in 1974 served as the director-general of the National Insurance Institute. In 1976, he was appointed treasury director-general, serving under finance ministers Yehoshua Rabinowitz and Simha Ehrlich. After leaving the treasury, he served as CEO of Tiush, a company that owned and established industrial plants nationwide. In 1986, he was appointed CEO of Bank Hapoalim, where he acquired his public status as a prominent banker whose actions impacted the entire Israeli banking sector.

When he took the job, Bank Hapoalim was split and sickly - both in personnel and financial terms. Personal battles between Jacob Levinson and Giora Gazit, preceding Sivan's arrival, had divided the bank's upper echelons into rival camps, accompanied by ugly battles. The Bejsky committee forced Gazit to resign due to his involvement in the banking sector share-ramping scandal. Levinson committed suicide while under investigation.

On the business side, the situation was no less dire. The bank was up to its neck in huge kibbutz debt and bad loans to Histadrut labor federation factories founded by Hevrat Ovdim, a Bank Hapoalim-controlled company. For all practical purposes, the bank's

equity was close to zero and if the kibbutz crisis had been recorded "according to the book," the bank would have posted an equity deficit.

Upon taking office, Sivan identified the bank's two key problems - its credit portfolio and the ugly personnel battles. "The first thing Sivan did was to end the civil war," Joseph Dauber, then the credit division manager, said over the weekend.

"Sivan said, `The past is the past and from now on we look forward,'" said Dauber, who worked closely with Sivan. "He didn't remove anyone from management. He played a central role in creating quiet. Then he started processes moving that would resolve the credit issues. He led - together with his friend and colleague and the bank's chair Eitan Berglas - debt arrangements for major concerns Koor and Solel Boneh, and he determined the nature of relations with the rest of Israeli banks and foreign banks in creating the debt arrangements."

Bank Leumi CEO Galia Maor, supervisor of banks when Sivan took over at Bank Hapoalim, followed the rehabilitation of the bank's credit portfolio very closely. "Amiram got a bank in very serious condition, and he was the great healer. He did it wisely and cautiously, knowing to leverage the bank's relative advantage in retail banking," Maor said yesterday. In 1995, Maor was appointed CEO of Bank Leumi - Bank Hapoalim's largest competitor - and the two preserved their close relationship over the years. Two years ago, when Bank Hapoalim shareholders were looking for a new CEO, Sivan recommended Maor for the job.

Sivan's tenure at Bank Hapoalim can be described in three basic periods: the late `80s - years devoted to rehabilitating the bank; the early `90s through 1997 - years of recovery and the transition to high profitability as Bank Hapoalim's business sector operations grew and operations in the government sector shrank; and September 1997 until his retirement - years of growth in which the bank strengthened its status under private shareholders, the Arison-Dankner group.

In Sivan's early years at the bank, it functioned - as did the rest of the sector - as a sort of pipeline channeling state-guaranteed loans. The privately held business sector had little credit and the majority of the bank's resources were consumed by Histadrut enterprises, the state and the settlement movements. In the early `90s, after completing the Koor debt arrangement, the wave of immigration from the former Soviet Union gained momentum, the economy grew, and the banks grew with it. During this time, Bank Hapoalim surpassed Bank Leumi and became Israel's largest, most profitable bank.

The bank's strong suit has always been its hold on the household sector - surefire, fat profits. Sivan, who inherited from Levinson an extensive retail deployment and the sector's largest army of private customers, was wise enough to nurture and preserve the bank's leading status in this field.

In the mid-1990s, Bank Hapoalim became Israel's most profitable enterprise, under Sivan's tutelage - gaining Sivan the nickname "the most powerful man in Israel." The nickname stuck due to the bank's tremendous power, taken in part from an empire of hundreds of companies that controlled 8.2 percent of gross national product.

The bank's power was so great that the treasury and the Bank of Israel decided to reduce it using the Brodet committee recommendations to lower holdings in non-financial corporations. Sivan fought the recommendations but was forced to implement them, selling a series of companies, including holding companies Clal, Ampal and Koor, investment bank Poalim Investments and energy giant Delek. The garage sale didn't interfere with the bank's growth or profits. In the gay years of growth, even serious obstacles like the Tzabari share manipulation affair and the 1993 credit-for-mutual-fund-memberships affair, couldn't dampen the joy. Bank Hapoalim did, however, compensate members of its provident funds for damages from the Tzabari affair.

The biggest change attributed to Sivan came in the second period of his time in office - the establishment of business divisions specializing in various clients instead of banking products.

In 1995, the bank established four divisions for different populations: households, mid-size commercial customers, major business companies, and private banking services for high net worth individuals. Sivan's approach was that each customer category needed different kinds of service and the divisions needed to focus on the customers and not the products. Other banks adopted the strategy.

In September 1997, the state sold the bank to the Arison-Dankner group, which paid $1.4 billion for a 43 percent controlling stake. This change made Sivan concerned about the loss of his independent status. For years, he was the boss at the bank, and the entry of new owners threatened his status. But Sivan was held in high esteem by the new shareholders, namely Ted Arison, who led the group that invested in the bank.

This was expressed in a five-year contract that made Sivan the highest paid CEO in the banking sector. His compensation was linked to the bank's performance and, in 2000, Sivan's pay stub cost the bank the record-breaking sum of NIS 10 million. The generous contract reflected the controlling shareholders' esteem but also their dependence on Sivan in their first years at the bank. After learning of Sivan's death, the chair of Bank Hapoalim's board of directors, Shlomo Nehama, said: "He was my guide and tutor at the bank."

Two years ago, the bank's Israeli shareholders - Nehama, and Nochi and Danny Dankner - felt the time had come to replace the CEO, believing it would be impossible to make extreme streamlining measures under the leadership of Sivan, who was well-known for opposing layoffs. Sivan was replaced by Eli Yones, who implemented a downsizing plan that involved 800 pink slips. This was the bank's first mass layoff and it caused a shock wave still felt today - Yones's resignation after disputes with Shari Arison, and her recent emigration from Israel, in part due to criticism for the move.

Sivan's many friends inside and outside Bank Hapoalim said he adapted well to changes in the economy and in the bank's ownership structure, despite his reputation as being not an easy man to work for.

What was the secret of his success?

People who worked with him feel his sharp macroeconomic understanding helped him analyze the economic situation and direct the bank's operations, while courage helped him make difficult decisions. His analytical skills and ability to handle problems at a fundamental level also served him well, as did an ability to listen to his subordinates.

A senior Bank Hapoalim executive said Sivan had a rare ability to identify good people and tailor positions to them. "He recognized potential in people. I never found errors in appointments. When we disagreed, the mistake was always mine."

According to the executive, at the beginning of Sivan's time at the bank, he made important moves that impacted the bank's future. "He increased its operations in areas where it was inactive - the mid-size business sector and large privately held companies. He broke the ties between the major Histadrut concerns and the bank. Sivan wanted them to work with other banks, as well, and for Bank Hapoalim to work with other customers. He limited the amount of government activity in the bank's overall operations. The banking sector then was a pipeline for the state but he knew that pipeline was going to dry up. His greatness was in foreseeing that. He was free of delusions. But he had no megalomania."

The way he ended his tenure at Bank Hapoalim affected his mood and for the past year and half he tried to raise an investment fund that would bring him back to the centers of influence. However, he understood that after a long career at the state's biggest bank, any job would seem too small. In the meantime, he was dealing with a scandal at a Bank Hapoalim subsidiary Israel Continental Bank, which granted an enormous NIS 190 million in credit to the Peled-Givony group. Sivan served as chairman of Continental's board and didn't keep the minnow bank out of trouble, even though Hapoalim under his direction steered clear of the Peled-Givony quagmire.

"The way he left the bank was certainly not pleasant for him. There were things he wasn't willing to do. He would never have agreed to firings," a former bank executive said.

Galia Maor also thinks his relationship with the bank's employees was especially significant. "People were very important to him, he was a macroeconomist of the highest order. It is impossible not to note his relationship with Eitan Berglas, together an excellent team of vision and leadership. Amiram knew how to navigate the bank through the period of privatization, from Histadrut ownership into private hands. He knew the importance of cooperating with banks in Israel and abroad. He always saw the big picture. Sivan was a friend and will be missed."