Immediately after Zion Kenan announced last Thursday he was stepping down as CEO of Bank Hapoalim, a handful of names surfaced as likely successors for the top job at Israel’s largest lender.
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But just days later, banking sources say that one of the candidates, Ari Pinto — who now holds the No. 2 job at Hapoalim as deputy CEO and chief operating officer and head of strategy, resources and operations — is almost certain to be named CEO before Kenan formally leaves office in six months’ time.
“It would have been the right thing for the board of the bank to take a broad perspective and seriously consider outside candidates — and not just from the banking world. But it appears that’s not what’s going to happen,” said one former Hapoalim executive.
The nervousness surrounding Kenan’s resignation and the appointments process — all of which come against the background of the Knesset’s voting into law a severe pay cap on bankers’ compensation — have weighed on Hapoalim shares. On Monday they ended down 1.9% at 18.85 shekels ($4.98).
Pinto, who was promoted to the COO post in January, is said to be working closely with Kenan on a day-to-day basis, attending events together and consulting on strategic decisions. The two are already acting like Pinto is in the transition period to CEO, even though the selection process has yet to begin and the board has not named a search committee.
But Hapoalim’s board and top management are likely to be cautious in conducting the appointments process.
When Zvi Ziv, Kenan’s predecessor as CEO, announced in March 2009 he was stepping down, then chairman Danny Dankner immediately announced that Kenan would be appointed to the job. Anointing the next CEO without going through the formal processes in a business the size and importance of Hapoalim angered Stanley Fisher, who was then Bank of Israel governor, as well as then Banks Supervisor Rony Hizkiyahu.
Relations between the central bank and Shari Arison, Hapoalim’s controlling shareholder, grew tense. Hapoalim retreated and appointed a search committee, which came back with Kenan as the candidate for CEO.
Hapoalim doesn’t want to repeat that error this time, but sources said they believe Kenan is determined Pinto gets his job, and the outgoing chief has the skills to ensure it will happen.
“Kenan is smart in regards to politics inside a big organization like Hapoalim,” said one capital markets source. “The other senior managers who could have competed for the CEO post are no longer with the bank and so they aren’t as realistic. That’s no accident. With Kenan, nothing happens by accident or by chance.”
They include Lilach Asher-Topilsky, a former top Hapoalim executive, who left to become CEO of Israel Discount Bank.
Like Kenan, Pinto came from a poor family. Born in Morocco in 1961, his family immigrated to Israel three years later. By age 12 he was orphaned and attending the Ben Shemen boarding school. Handicapped by childhood polio, he didn’t serve in the army and attended college in the United States and received a master’s in business from Bar-Ilan University.
He began his career as an investment adviser at a Hapoalim branch in 1981 and served in a variety of positions, including as chairman of the workers’ committee. He was promoted to head of human resources just as Hapoalim slashed 9,000 jobs.
By 2009, he was promoted by Kenan to deputy CEO and head of strategy, where has been the one to put Kenan’s policies into place, in particular Hapoalim’s focus on consumer credit. Pinto was also charged with implementing another round of job cuts amounting to 1,800 positions over the last three years, a move that has made it more efficient on an operating basis than its rivals.
In October 2013, when Asher-Topilsky quit as head of Hapoalim’s consumer banking division — its biggest and most important — Pinto took over. By the time he moved on to COO just two years later, the division was the most profitable and efficient in the banking system.
“Pinto may be less charismatic than Kenan but he knows how to write and express himself well. He listens to people and has helped not a few employees at the bank who were in need," said one Hapoalim executive.
Aside from his banking career, Pinto plays wheelchair basketball for a team sponsored by the Wingate Institute and led the Israeli team at the Beijing Paralympics in 2008. He is also a rated chess player.