Mizrahi Tefahot storming mortgage market

Bank Mizrahi-Tefahot is preparing to escalate competition in the mortgage market this year, mainly against Bank Hapoalim. At a meeting this week, management approved a working plan for the year that includes a 20% increase in the number of branches that provide mortgages, bringing the number to 105 by year-end, from 79.

Some of Mizrahi-Tefahot's mortgage outlets are stand-alone banks, and others are divisions inside regular banks. Management intends to open 14 more outlets inside banks around the country, including in Safed, Beit She'an, Pardes Hannah, Alon Shvut and Be'er Sheva. The big cities are not ignored: Tel Aviv, Ra'anana and Petah Tikva will also be getting new branches. Some of the new outlets will be inside Yahav branches, following Mizrahi-Tefahot's acquisition of that chain of banks last year.

Mizrahi-Tefahot's goal is not just to maintain its market share, but to increase it. The bank hopes to reach 40% of Israel's mortgages market, compared with 35% in 2009.

Its main rival in 2010 is Bank Hapoalim, which recently commenced a campaign urging consumers to borrow to buy a home "at home." Hapoalim's share of the retail banking market is 35%, but its share of the mortgages market is lower. By mid-2009, Hapoalim had receded to just 19% of new mortgage loans. It aspires to reach a 35% market share.

Given that it is one of Israel's two biggest banks, the other being Leumi, Hapoalim extends mortgages mainly to its own clients. Like Mizrahi-Tefahot, it means to increase the number of mortgage officers at its branches by several dozen this year. As for Bank Leumi, it is mainly concerned with not losing its share of the mortgages market as Hapoalim and Mizrahi-Tefahot battle it out.

Tefahot had been a stand-alone mortgage bank until it merged with Mizrahi in 2005.