Leumi, Discount to sell small European units
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Two of Israel’s largest banks said Tuesday they were selling stakes in small European units, as part of an ongoing trend of Israeli banks backing away from their international private banking services.
Israel Discount Bank, the country’s third-largest lender, signed a deal to sell the operations of its Swiss unit to Hyposwiss Private Bank Geneve for 10.9 million Swiss francs ($10.7 million). Discount said the sale of its Swiss subsidiary, which manages 1.35 billion francs in assets, is part of its strategy to focus its international operations on the United States. It recently sold its unit in Latin America and closed a branch in London.
Separately, Leumi, Israel’s second-largest bank, said it was selling the assets of its subsidiary in Luxembourg to Banque J. Safra Sarasin for $3.5 million. Both banks said the deals are subject to regulatory approvals and that they do not expect them to have a significant impact on their finances.
In an era when international tax oversight is increasing, operating private banking units overseas involves more risk than gain for the banks. Israel banks got into the overseas market a few decades ago. These operations, which were initially targeted at Jewish and Israeli customers overseas, ultimately never proved profitable. (Michael Rochvarger and Reuters)
Playtech won’t buy forex shop Plus500
Gambling technology provider Playtech said its takeover bids for retail forex trading shop Plus500 and online derivatives broker Ava Trade fell through due to regulatory concerns.
Shares in Playtech, which was founded by Israeli billionaire Teddy Sagi, fell as much as 12.3% in early trading, while those of Plus500 plunged as much as 22%. The terminations dent Playtech’s attempt to build an online retail financial business as tighter regulation of the UK’s gambling industry and higher taxes hurt its flagship betting software business.
The company, which has already spent more than $1 billion this year to diversify into forex trading, said it dropped its $700 million bid for Plus500 as the deal was unlikely to obtain approval from U.K.’s Financial Conduct Authority by the end of December. (Reuters)
Currency effects on coffee sales hit Strauss
Strauss Group reported a 28% fall in third-quarter profit Tuesday, hurt by currency effects on coffee sales in emerging markets. Strauss, the second-largest company in the Israeli food and beverage sector, is a market leader in roast and ground coffee in central and eastern Europe and Brazil, where it was hit by the weakening of the Brazilian real and Russian rouble.
Coffee revenue, which accounts for 44% of total sales revenue, dropped 14% to 876 million shekels ($225.8 million), the company said. Excluding foreign currency effects, coffee sales rose 12.7%. The maker of snacks, fresh foods and coffee, which also had to contend with a new Israeli law aimed at lowering food prices, reported adjusted profit of 86 million shekels in the three months to Sept. 30, against 119 million shekels a year earlier. (Reuters)
TASE closes down amid Russian-Turkish crisis
The Tel Aviv Stock Exchange finished Tuesday’s trading session with losses, as stocks closed downward around the world. International trade was affected by the diplomatic crisis between Turkey and Russia, after Turkey shot down a Russian fighter jet in its airspace. The blue-chip Tel Aviv-25 Index lost 0.7% to close at 1,562 points, while the broader Tel Aviv-100 index lost 1% to close at 1,343 points.
The Banks-5 closed unchanged, while the Real Estate-15 lost 0.6%. Oil and gas shares gained 0.1%. Communication shares lost 0.7%, after losing 3.3% the previous day. Notable shares included Perrigo, which lost 5% as it closed an arbitrage gap. Strauss gained 3.4% after publishing its financial reports.