Israel's Bank Hapoalim to Forge Ties With UAE Banks After Normalization Accord Signed

As business delegations begin, Bank Hapoalim CEO says there is 'immediate bilateral desire' for strong economic ties

Reuters
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The logo of Bank Hapoalim, Israel's biggest bank, is seen at their main branch in Tel Aviv, Israel July 18, 2016.
The logo of Bank Hapoalim, Israel's biggest bank, is seen at their main branch in Tel Aviv, Israel July 18, 2016.Credit: REUTERS/Amir Cohen

Israel's largest lender Bank Hapoalim expects to start working with banks in the United Arab Emirates once the two Middle East governments sign a normalization agreement, its chief executive said on Wednesday.

The UAE and Israel are due to sign the agreement brokered by the United States on September 15 at a ceremony hosted by President Donald Trump.

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Hapoalim CEO Dov Kotler, who is leading a two-day trip from September 8, said a correspondent banking relationship facilitating direct money transfers between the countries would help develop trade and business ties.

"I believe that after the governments sign the agreement next week we will be able to work with the banking system here," he told Reuters during a visit to the UAE.

In correspondent banking, a bank with no branch or network in a given country will typically channel payments there through a local bank that acts on its behalf.

"We are here to build trust before talking business. In order to build trust I believe we have to meet face to face and that is what we are doing," he said.

This came after Kotler on Sunday called the delegation "a unique opportunity to establish economic relations and cooperation between our countries and their financial systems, which will yield economic growth for both parties."

He added there was an "immediate bilateral desire" to establish strong economic ties.

The chairman and CEO of Bank Leumi, Israel's second largest bank, is also embarking on another delegation on September 14.

Leumi said it hoped to build on the diplomatic accord by kick-starting cooperation in finance, technology, health, tourism, agriculture and industry.

Israel and the UAE announced in August they would normalize diplomatic ties and forge a broad new relationship in a U.S.-brokered deal. Last week, they 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 Hapoalim and Leumi.