BANKING SYSTEM OF ISRAEL
Small Israel today has about 20 banking institutions. A relatively large number of banks is due to several factors, including the amount of capital of each bank, size of its target audience, type of activity and so on.
Israeli banks can be divided into several groups. First of all, 5 leading commercial banks, holding the largest number of current accounts and deposits of the population in their hands. Banks within this group are:
Bank Hapoalim, that in translation means the Bank of Workers. The bank positions itself as the largest bank of Israel, which he was for many years. The bank existed under the auspices of the Working Party of Israel and received substantial assistance from the state for many years of the Working Party ruling. In recent years the Bank has been actively developing a system of private banking, expands boundaries of its international presence. It is worth noting that it has its representative offices open including in Moscow and Almaty. No one can do without scandals though, thus in 2009 a group of top-managers of the bank and businessman Arkadiy Gaydamak were indicted for illegal transactions worth hundreds of millions of shekels by means of the Dutch company.
Bank Leumi, or the National Bank, is the second largest bank in Israel, surely competing with Hapoalim. This bank is characterized by activity in all sectors of commercial banking, including mortgage financing. Bank Leumi was the first bank to offer a system of virtual banking services to customers under the brand Yashir bank, when the money were located on the accounts of Bank Leumi and the service was carried out by telephone, Internet and through messengers, so that client does not have to visit the Bank's branches. The project is considered successful, thought it did not bring a large number of new customers to the bank. Leumi opens representative offices outside Israel, mainly in countries with large Jewish communities.
Discount Bank traditionally has been positioned as the third-largest bank in Israel. It is involved in consumer crediting, mortgage financing. Same as its competitors develops the scope of private banking and has overseas representative offices in Switzerland, United States and Latin America.
Mizrahi-Tefahot Bank is a product of the recent merger of the largest mortgage bank Tefahot with a small but progressive commercial bank Mizrahi. Herewith, the fourth-largest banking corporation of Israel appeared. The bank is actively working to improve its position, however, largely continuing to operate as two parallel organizations under the overall title. The Bank has representative offices in Europe, North and Latin America, as well as in Cayman.
Bank Beinleumi ha-Reshon - First International Bank, the English abbreviation FIBI (First International Bank of Israel), closes the top five leading Israeli banks. The bank can boast a successful commercial activity, high-quality client base and advanced management methods. The bank sharply aware of the need to expand and find clients engaged in international business. FIBI became the first and still the only bank that has established a subsidiary bank specializing in providing VIP-service for wealthy clients, UBank. Today, our company recommends FIBI as a banking partner in Israel.
Representations of international investment banks in Israel is an additional group of banks, which deserves consideration in this review and includes the following banks:
- HSBC
- Citibank
- NBP Paribas
- State Bank of India
It should be noted that presence of representative offices of international banks indicates the increasing importance of the Israeli economy and its financial sector in international activities.
In addition to the already mentioned trend intended to enhance the development of private banking, the Israeli banking system is experiencing the consequences of the recent pension reform, under which banks lost their licenses to own and manage pension savings. As a result of the reform, banks were forced to sell pension funds to the hands of private investment companies. As compensation they received permission to provide advisory services on pension insurance.
Israeli banks have a positive image in the international arena. They are reliable business partners, and provide quality banking services, both in technological and in business sense. The Central Bank of Israel and the Ministry of Finance supervise the activities of banks. This allows recent bank system to operate in transparent mode and reduce risks of the owners of deposits and bank customers.