Hapoalim is the bank most exposed to Africa Israel
Bank Hapoalim has lent more money to real estate development magnate Lev Leviev than any other Israeli bank in the land. The loans to Leviev were given to Africa Israel Investments, the publicly traded company controlled by Leviev, and to Memorand, one of Leviev's privately owned companies.
All of Leviev's 76% stake in Africa Israel has been used to secure those loans, mainly from Hapoalim. The value of this security, however, has been steadily declining as the financial crisis deepens.
In October 2008, when the use of Leviev's shares as collateral at Hapoalim and Leumi was first publicized, the shares were worth about NIS 4 billion. Now those shares are valued at just NIS 1.26 billion, and the banks have asked Leviev for more collateral. Some of Leviev's loans may also have to be included in the banks' provisions for doubtful debts. Hapoalim has already written off hundreds of millions of shekels of Leviev's debts, according to estimates from some banking industry sources.
Hapoalim's dubious debt grew to NIS 2.6 billion in the third quarter and some assessments attribute most of that sum - around NIS 1.6 billion - to the bank's exposure to Leviev's firms.