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.

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