Israel's Largest Bank Plans Shake Up in Medium-sized Business Lending

Business in Brief | Menora, Altshuler Shaham mulling merger of mutual funds businesses; Bino cuts Paz stake to 11% in 700-million-shekel share sale; Tel Aviv shares end higher, led by biomed.

A Tel Aviv branch of Bank Hapoalim, June 13, 2016.
David Bachar

Menora, Altshuler Shaham mulling merger of mutual funds businesses

The insurance group Menora Mivtachim is reportedly in talks to merge its money-losing financial-services unit to the Altshuler Shaham investment house. Reports said the two sides would do the deal through an exchange of shares between Menora Finance and Altshuler’s mutual funds unit. The merged business would create a mutual fund manager with some 24.7 billion shekels ($6.4 billion) in assets. No value was reported for the deal, but with Menora Finance counting just 10 billion shekels in assets under management (of which just over 80% is in mutual funds), its parent company will end up with a minority stake in the merged company and no control. Altshuler, by comparison, manages 68 billion in assets, of which 16 billion are in mutual funds. The merger will enable Menora Mivtachim to off-load a unit that ran up 10 million shekels in losses in the first nine months of this year alone. Shares of Menora ended up 0.9% at 34.66 shekels (Assa Sasson and Guy Erez)

Bino cuts Paz stake to 11% in 700-million-shekel share sale

Zadik Bino’s group has effectively become the first to make the decision between divesting financial and non-financial holdings as required under the Business Concentration Law. Bino signaled in September that he was exiting Paz Oil in favor of maintaining his controlling stake in First International Bank of Israel. But because he still held 22.5% of Paz and the deadline for fully divesting is in 2019, observers speculated that the businessman was continuing to play a behind-the-scenes role in the company. However, he sold 700 million shekels ($181.8 million) of his Paz stock last Thursday, cutting his stake to 11%. The holding may fall even further in the next 14 days, when the Australian Lieberman and Abeles families decide whether to sell 200-million-shekels-worth of their Paz stock and reduce their holding to 4%. If not, Bino will sell an equivalent amount of his shares. Shares of Paz fell 1.4% to 561 shekels. (Michael Rochvarger)

Bank Hapoalim plans shake up in medium-sized business lending

Bank Hapoalim will be taking steps to expand and upgrade its lending to medium-sized business, starting after next month, as it tries to catch up with market leader Bank Leumi. Recommendations by the Boston Consulting Group, which will likely be approved by Hapoalim’s board next month, call for closing some of the 22 branches that currently serve the sector, reducing the size of others and spending tens of millions of shekels on developing digital services that will reduce the need for business customers to visit branches at all. Hapoalim leads the banking industry in lending to big business and has expanded its middle-market lending by aggressive lending to the real estate sector – but Leumi remains the market leader in the segment for loans of 10 million to 100 million shekels ($2.6 million-$26 million). Hapoalim shares rose 0.4% to 22.39 shekels. (Michael Rochvarger)

Tel Aviv shares end higher, led by biomed

Tel Aviv shares rose yesterday as biomed stocks rallied and telecoms stocks declined. The blue chip TA-25 index ended 0.2% higher at 1,459.05 points, while the TA-100 added 0.15% to 1,273.24, on turnover of 523 million shekels ($135.8 million). Biotime led biomed stocks higher, climbing 12% to 14.66 shekels, while Mannkind advanced 3.6% to 2.37. Telcos were led lower by Cellcom Israel, which declined 3.4% to 30.75 shekels, and Partner Communications, which shed 3.3% to 18.45. Africa Israel soared 58% to 74 agorot, capping a sharp rise over the last three days, even though there was no news to explain the gains. Entropy, a shareholders’ advisory service, yesterday recommended that shareholders back the proposed merger of Avner with its sister company Delek Drilling in a vote this Thursday. Avner finished the day 0.4% higher at 2.78 and Delek gained 0.3% to 14.79. Ashtrom Group rose 2% to 10.35 after Apex Capital rated the shares to a Buy and set a target price of 13.54 shekels. (Shelly Appelberg)