The rise of online banking business and the declining use of cash has caused Israeli banks to shutter branches, especially in the central cities. But many Israelis still keep a lot of cash – not to mention important documents and valuables – and they are running out of places to securely store it as branch closures mean fewer vaults for safety deposits boxes.
Enter Ruthenium, named after a rare metal, which is making deals with Israeli banks to buy their vaults and secure rooms and offer the service directly to customers.
The company has already spent 20 million shekels ($5.6 million) to buy three vaults it acquired from Mercantile Discount Bank in Tel Aviv, Bank Leumi in Haifa and Bank Hapoalim in Netanya. TheMarker has learned that Ruthenium is in advanced negotiations to spend tens of millions of shekels more to buy three other vaults from banks in Jerusalem, Ashdod and Eilat.
Ruthenium was founded by Pierre Besnainou, whose made his fortune in a group of French companies that include the apparel brand Morgan. In Israel, he’s most famous for reviving the Burger King franchise three years ago after a six-year hiatus.
The company now operates 15,000 safety deposit boxes and has the room in its existing facilities to double that number.
Managing safety deposits boxes is a lucrative business. It’s estimated that about 100,000 Israelis have one, paying between 1,000 and 2,500 shekels a year. The Israeli affiliate of Brinks, the global company famous for its armored cars, recently began offering safety deposit boxes to private and business clients as well.
Ruthenium charges in shekels between 60 and 85 shekels a month (its dollar prices are a steeper $29 and $99 a month), depending on the size of the box, according to its website. It also offers complete vaults starting from 4,999 shekels.
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When you open in English, the site doesn’t give you a Hebrew-language alternative - in Hebrew, it offers French and English.
“There are small safe deposit boxes for keepsakes, jeweler and passports, medium-sized boxes that typically accommodate items such as gold bars, laptops and legal papers; and large-sized boxes and walk-in vaults that can house a lifetime’s collection of antiquities, coins or stamps – you could fit a double bed in the largest one,” the company says.
Israeli banks have been closing branches as they offer more and more services online and the government discourages the use of cash in a bid to crack down on tax evasion and money laundering.
Mizrahi Tefahot and Israel Discount Bank (the parent of Mercantile) have both notified clients that they are closing all their vaults and have given customers several months notice to find an alternative. As of now, Discount has already shut four of its seven safety deposit vaults.
Hapoalim recently sent its clients a notice informing them that “after eight years during which we closed no bank vaults, we are now examining future operations.”