 | This articleneeds additional citations forverification. Please helpimprove this article byadding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Banking in Israel" – news ·newspapers ·books ·scholar ·JSTOR(July 2024) (Learn how and when to remove this message) |
Banking in Israel has its roots in theZionist movement at the beginning of the 20th century prior to the establishment of theState of Israel in 1948.
TheWorld Zionist Organization established theAnglo-Palestine Bank in 1903 (which later was renamedBank Leumi). The two largest banks control over 60% of banking activity, and the top five control over 90%.
Most of the banks were nationalized when their stocks collapsed in the1983 bank stock crisis. Since then, the government has sold much of its bank stock holdings but still remains a large stockholder in many of the now privately held banks. The government soldBank Hapoalim in 1996 and Bank Mizrahi (now merged intoBank Mizrahi-Tefahot) in 1998. The government also sold a major part of its stock inDiscount Bank in 2006 and inLeumi Bank in 2005.
As of 2022, there are ten commercial banks, four foreign banks, and a joint service company for clearing, all of which are supervised by the Banking Supervision Unit of theBank of Israel.
Five main groups dominate most of the banking operations in the country. The largest among them isBank Leumi, founded inLondon in 1902[1] in accordance withTheodor Herzl's vision and initially intended to serve as an economic arm for the youngZionist movement. Initially namedAnglo-Palestine Bank, it was later renamed Bank Leumi and served the state as a quasi-central bank at its inception. Despite continuous attempts by the state to privatize or at least sell a controlling stake, such efforts failed, leading to plans for its privatization through public stock offerings.[2]
Bank Hapoalim, the second oldest bank in the country was founded in 1921 by the central institutions of the Jewish Yishuv at that time - theZionist Organization and theGeneral Federation of Jewish Workers in Palestine. Over the years, the bank has developed a network of branches and commercial banking activities across all banking sectors, providing a wide range of banking and financial services in Israel and beyond.[3]
The third largest bank in Israel isMizrahi Tefahot Bank, founded in 1923 by theMizrahi movement and currently controlled by the Ofer-Wertheim group. In addition, the bank holds a 50% stake inBank Yahav. In 2022, it merged with the activity ofAgudath Bank, acquiring 100% of the bank's shares.
Fourth oldest bank in Israel is Discount Bank, founded in 1935 as "Bank Leumi Leisrael" by the Cruso, Elbow, and Recanati families. The bank survived the difficult years of World War II and became a large and leading bank after the establishment of the state. The bank has faced difficulties due to wrong business decisions and strained labor relations between management and the workers' committee, but it has recovered from them. The bank also controls Discount Mercantile Bank and is owned by the Canadian-IsraeliBronfman family.
Of the major bank the fifth is Bank International, controlled by a group led by businessman Zadik Bino. It also ownsBank Massad.
In addition to the five major groups, there are two more commercial banks operating in Israel that provide services to private and business customers:Jerusalem Bank,Bank Yahav [he], and the digital bankONE ZERO, which began operating in 2022. In December 2022, the Bank of Israel approved the establishment of another new bank, "Bank Ash Israel."[4]
Foreign banks with branches in Israel includeCitibank N.A.,HSBC,BNP Paribas,Deutsche Bank,Credit Suisse, andState Bank of India. Foreign banks that have closed their operations in Israel includeBarclays.
There is alsoPostal Bank (Bank Ha-Doar) which maintains current accounts with the basic services, but cannot provide credit activities in any way. The Postal Bank is supervised by Ministry of Communications under the Postal Law.
| Banking group | Established | Number of Branches | Total Assets (NIS million) | Share of total banking system assets | Share of total banking system credit | Share of total banking system deposits | Equity (NIS million) |
|---|---|---|---|---|---|---|---|
| Bank Leumi group | 1902 | 193 | 699,166 | 26.5 | 29.3 | 29.18 | 49,443 |
| Hapoalim group | 1921 | 233 | 665,353 | 26.8 | 27.9 | 27.9 | 46,503 |
| Discount Bank group | 1935 | 178 | 376,754 | 16.6 | 15.8 | 15.31 | 25,478 |
| Mizrahi-Tefahot Bank group | 1923 | 198 | 428,292 | 21.1 | 18.0 | 18.05 | 24,868 |
| First International Bank group | 1975 | 103 | 195,955 | 8.0 | 8.2 | 8.81 | 11,035 |
| Bank of Jerusalem | 1963 | 23 | 18,907 | 1.0 | 0.8 | 0.75 | 1,256 |
| Source:Annual survey 2022 Bank of Israel | |||||||
TheBank of Israel supervises Israeli banks via the Supervisor of Banks.The tasks and authority of the Supervisor of Banks are based on several laws:[5] Banks are subject of specific laws as corporations.
