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As of January 1, 2008, Bank Hapoalim and Bank Leumi will be licensed to provide pension consulting services for the self-employed, and for salaried workers in National Priority areas A and B, excepting Ashkelon, Ashdod and Beersheva. The permit was granted ahead of market expectations.

The decision was reached on Sunday between Knesset Finance Committee Chairman Stas Misezhnikov (Yisrael Beitenu) and Treasury Capital Markets and Insurance Commissioner Yadin Antebi. The accord ends their disagreement over the timing of introducing pension consultancy into the realm of activity of Israel's large banks.

Antebi, who reached an agreement this summer with Bank Hapoalim that allows the bank to begin offering pension consultancy services only in the summer of 2010, was forced to compromise on the issue after Misezhnikov took the position that the large banks should be allowed to enter the field of activity immediately.

According to the agreement, the large banks will be able to provide objective pension advice to the self-employed, to salaried workers residing in 'peripheral areas' as defined in the agreement between the two, and to salary earners in the Arab sector, as soon as preparations are finalized. The large banks will begin offering pension consultancy services to other salary earners in August 2010.

Leumi has sold off its provident funds and mutual funds as required by the Bachar Commission, which had been headed by former treasury director-general Joseph Bachar. Leumi has only kept its employee's provident fund, which is in the process of being turned over to outside management. Hapoalim, on the other hand, has not completed the sale of its relevant assets, in particular its Gadish provident fund, the process of which is bogged down by various difficulties and legal proceedings.

Leumi has nearly completed its preparations for application for a license, and according to the bank, is expected to step into the arena of pension consultancy in the first quarter of 2008.

According to Leumi, the new agreement will allow the bank to offer such consultancy services to wage earners in 60 of its branches, including 24 branches of the Israel Arab Bank in the immediate future. In addition, the self-employed sector is set to benefit immediately from the new services in all of the group's branches. Hapoalim, on the other hand, will have to wait until it has sold off Gadish to receive a license from Antebi.

The current agreement is in addition to an earlier one between Misezhnikov and Antebi and insurance agents, which provides that smaller banks are to be licensed to provide life insurance consultancy services as of January 2009, and the larger banks as of April 2009, moving the schedule forward from the initial plan. Both agreements are to be brought for approval to the Finance Committee.

Leumi, however, may find it more difficult than anticipated to take advantage of the lead it has gained in the insurance area. Ronen Yisraeli, who heads the bank's Yashir Harishon direct, on-line and phone service banking activity, is the fourth resignation of senior management which Bank Leumi has recently suffered since September.

Yisraeli joins the now retired Michael Bar Haim, former head of the Commercial Banking Division; Shuki Oren, CEO of Bank Leumi Switzerland; and the head of Leumi's Banking Division Yona Fogel, who have left Leumi for other enterprises.