Bank profits are expected to grow by hundreds of millions of shekels next year in the wake of last month's merger of the cable companies. The merger involves a deal that plays in the bank's favor.
The merger reflects a debt value per subscriber of $850-$900. The supervisor of banks in 2002 had ordered the banks to make a doubtful debt provision of a billion shekels based on a debt per customer of more than $1,150. The upshot of the reduction in debt per subscriber is that the banks will be able to reduce that provision in favor of its profit line.
A senior bank manager believes the supervisor of banks should send out a directive how to restate the debt, even though the bank leadership has sole authority to decide on correcting the provision. "It's a matter that involves all the banks," he said. "The supervisor needs to give direction on how to calculate the new size of the debt to prevent a situation in which each bank handles the matter in a different fashion," he cautioned.
Bank Leumi, which made a provision of NIS 300-400 million can expect to benefit more than any other bank from this development. Bank Hapoalim follows with a provision of NIS 200 million, and Israel Discount Bank isn't far behind with some NIS 150 million.
The collective debt of the cable companies to the banks is around NIS 3 billion. The banks hold about 30 percent of the unified company as collateral. Leumi holds the largest stake, more than 15 percent.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now