Hapoalim to Cut 700 Jobs in 2015, 2016

The Ticker: Wiessman quits Alon Group jobs; New leveraging standards placed on banks.

Tomer Appelbaum

Wiessman quits Alon Group jobs

David Wiessman, who led the Alon Group for some 30 years, has stepped down as CEO of the group’s Blue Square retail chain and chairman of its Mega supermarkets, after a bitter dispute with his uncle and controlling shareholder Shraga Biran. The conflict with Biran had already cost him his job as CEO of the closely held parent company Alon Group at the end of last year. He was replaced by Avigdor Kaplan, who is now negotiating a 2.2 billion-shekel ($540 million) debt bailout with bondholders. Wiessman, who is expected to quit his remaining jobs with the group in the next several days, won’t be going away empty-handed: His cumulative salary, dividends collected and monitory holdings in Alon Group companies adds up to as much 350 million shekels. Shares of Alon Blue Square finished up 0.2% at 11.39 shekels. (Michael Rochvarger and Adi Dovrat-Meseritz)

New leveraging standards placed on banks

The Bank of Israel imposed for the first time a ceiling on leveraging, saying that from 2018 shareholders’ equity must be equal to at least 5% of their balance sheets, including certain items off their balance sheets. The two biggest lenders – Bank Hapoalim and Bank Leumi – will have to meet an even stricter standard of 6%, Banks Supervisor David Zaken said. The new rule creates a single and simple standard for risk. A preliminary analysis by the central bank, which didn’t take into account off-balance sheet items, found that all the banks met the standard in 2014, with Hapoalim and Leumi in the range of 7.8%. Banking sources said the only lender that may see its growth constrained by the new standard is Mizrahi-Tefahot, whose business is heavily weighted to mortgage lending and whose ratio was 5.5% last year. (Sivan Aizescu)

Israel Railways maiden bond issue swamped with orders

Government-owned Israel Railways made its debut on the Tel Aviv Stock Exchange on Thursday as institutional investors piled into its first-ever offering of bonds. Institutions ordered some 4 billion shekels ($1 billion) of Series Aleph and Bet bonds, four times what was on offer. The 509 million shekels sold in the institutional tranche of 3.6-year Aleph bonds were sold at 1.24%, 64 basis points above equivalent treasury debt. Another 339 million shekels of 3.7-year Bet bonds carry an inflation-indexed interest rate of 0.6%. The bonds won a AA-plus rating from S&P Maalot and an Aa1 from Midroog. It was the first debt issue for Israel Railways since it was split off from the Ports and Railroads Authority 12 years ago and turned into a government company. (Michael Rochvarger and Avi Bar-Eli)

Hapoalim to cut 700 jobs in 2015, 2016

Bank Hapoalim, Israel’s largest lender, said yesterday it plans to reduce its workforce by up to 700 of its 12,700 positions this year and next, as part of an efficiency program that would include early retirement for some workers. The bank said last week it had provisioned 390 million shekels ($96.6 million) in the fourth quarter to cover the costs of early retirement, without specifying how many jobs it would cut. The efficiency measures will reduce its expenses by as much as 100 million shekels in 2016 and 170 million annually in the following years, it said. Hapoalim will make about half the cuts this year and the remainder in 2016, it said. Two previous programs in the past two years each reduced manpower by more than 500 workers. Shares of Hapoalim dropped 1.1% 17.89 shekels ($4.43). (Reuters)

Bank, energy stocks weigh on TA-25

The Tel Aviv Stock Exchange’s TA-25 index fell into minus territory mid-afternoon yesterday, led by declines in banking and energy shares. The benchmark index lost 0.8% by the end of the session to finish at 1,553.74 points on relatively heavy turnover for a Sunday of 912 million shekels ($225.6 million). The TA-100 also fell 0.8% to 1,365.44. Israel Discount led lenders lower, falling 2.6% to close at 6.40, while Bank Leumi declined 1.6% to 13.34 after Prime Minister Benjamin Netanyahu said he would name Moshe Kahlon finance minister if he gets to form the next government. Delek Drilling paced energy stocks lower, falling 4.1% to 13.02 shekels. IDB group companies were also sharply lower, with Discount Investment Corporation off 5.2% by the end at 7.63 shekels and IDB Development Corporation down 5.1% at 1.31 shekels. In the bond market, the government’s 10-year Shahar bond fell 0.32% to raise its yield to 0.03%. (Omri Zerachovitz)