One of the side effects of the coronavirus crisis for Israeli bankers has been the near-complete absence of air travel. Before the pandemic hit, many traveled abroad to attend conferences, business meetings and meetings of the boards of their overseas subsidiaries, among other activities.
For the past six months, they’ve been forced to stay at home. The normalization between Israel and the United Arab Emirates that was announced last month has opened up a new window of opportunity, however. In the space of a single minute on Sunday, Bank Hapoalim and Bank Leumi, Israel’s two biggest lenders, announced that they will be sending delegations to the UAE shortly. Off the record, each claimed that it was the first to come up with the idea.
Hapoalim CEO Dov Kotler arrived by private plane in Abu Dhabi and Dubai on Tuesday at the head of a small delegation of bank executives and businesspeople. They were due to meet with the local chambers of commerce and bankers, with the aim of signing agreements.
Kotler on Sunday called the UAE visit “a unique opportunity to establish economic relations and cooperation between our countries and their financial systems, which will yield economic growth for both parties.”
Leumi’s delegation, headed by CEO Hanan Friedman and Chairman Samer Haj-Yehia, is scheduled to arrive next Monday. It will include some of the bank’s better-known corporate clients, such as insurance magnate Yair Hamburger, investor Ishay Davidi and Harel Wiesel of the Fox Group apparel business.
The bank, which is bringing some of its top executives, expects to also sign agreements with UAE financial institutions.
Last week, Israel and the UAE agreed to set up a joint committee to cooperate on financial services, aiming to promote investment between the two countries. First Abu Dhabi Bank, the UAE’s largest lender, said last week it would open discussions with both Hapoalim and Leumi.
- Israeli Business Delegations Led by Bank Hapoalim, Leumi to Visit UAE
- Israel-UAE Deal Brings 25 Years of Covert Diplomacy Out of the Shadows
- The New Normalization: Why Are Israelis So Indifferent Towards the Historic UAE Deal
Putting aside the public relations competition about who was the first to respond to normalization, the fact is there is big potential for cooperation with the emirates in the areas of financial services, technology, health care, tourism, agriculture and manufacturing. If Israeli bankers can familiarize themselves with the new territory, UAE business could eventually make a major contribution to their activities.
That said, some Israeli banks have a spotty record to say the least when it comes to generating profits from overseas activities and we’re not just talking about their role in U.S. tax avoidance. Hapoalim lost heavily in Kazakhstan, closed its London operations and hasn’t generated profits in the United States. Leumi lost money in Romania and didn’t succeed with its acquisition of Banque Safdie in Switzerland. Recently, it shuttered its China operations.
The only success stories have been Israel Discount Bank’s New York operations and Leumi’s in the U.S.
Reuters contributed to this report.