Written by: Zack Miller | January 27, 2009
Anyone who has been to an Israeli bank knows that efficiency is not in the bank’s repertoire. If you enjoy standing in line for seemingly meaningless tasks, spend some time in an Israeli bank. And if you want to move your account to another branch
(even within the same bank), fuhggetaboutit.
So, why are banks so infuriating for customers. Most of it is in the legacy holdovers from the socialist days. There is a lot of paper pushing, waiting and more than anything, decentralization of tasks. Israeli bank branches act somewhat autonomously and processes are duplicated instead of being centralized. That means more jobs and more work for employees.
So, it’s not surprising to see that Bank Hapoalim workers are pushing back on a proposal to streamline the bank, even when no layoffs are on the table.
The workers committee announced, “We oppose the restructuring at the bank and reject the streamlining document written by the bank’s management.”
What’s in store for the bank’s restructuring?
“2009 will be a very tough year in terms of the bank’s revenue. There is a need for streamlining and cost-cutting. Savings and streamlining are not a one-time exertion, but a way of life. We must be careful and calculating over every shekel we spend, and we must pare all unnecessary fat.” — CEO Bank Hapoalim
For a country with an extremely advanced technology backbone underpinning the Israeli banking system, it’s time we get the delivery of service accordingly.
Written by: Aaron Katsman | July 3, 2008
Aaron Katsman
IsraelNewsletter.com
As we have mentioned here before, many Israeli companies have to look abroad for growth. In many sectors, especially banking, the big players have such a large market share, that growth prospects are dim. Hence the need to look outside Israel for new markets.
Globes is reporting that Bank Leumi is looking to make an acquisition in Latin America. According to the paper: ” Bank Leumi (TASE: LUMI) is expanding its global activity, amid the realization that it will have difficulty increasing its market share in Israel. The bank intends to expand its activity in Latin America and acquire a financial institution, bank or broker for around $100-150 million. Leumi’s preferred countries are Mexico, Chile and Brazil.”
While the Israeli banks have some small US operations and also have operations in London and Switzerland, I would look for them to expand into Latin America, Eastern Europe and at a later date, Sub-Saharan Africa, as these are markets that with tremendous potential. Israeli banks happen to be second to none with regard to the sophistication of product as well as technology- including internet banking.
These value added services would be put to use best in emerging markets where the banking system is less sophisticated.
Look for Israeli banks like Bank Leumi to continue exploring for international acquisitions.
Disclosure: Author’s fund has no position in any stock mentioned as of 7/03/08.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
