Now Israel’s Bank Hapoalim selling its Swiss and Lux private banking businesses, amid regulatory pressures

Scarcely little more than a week after Israel’s Bank Hapoalim announced that an “investment company and institutional investors from North America” were to acquire a controlling stake in its operations came news today that the J. Safra Sarasin Group is to buy its private banking businesses in Luxembourg and Switzerland.

The news, which came in the form of a J. Safra Sarasin statement, was immediately seen as yet another indication of how the international private banking industry is consolidating.

It also follows, by 10 months, news of  Safra National Bank of New York’s plans to acquire Bank Hapoalim’s Miami private banking business for US$16.5m (£13m, €15.47m).

As  its name suggests, Safra National Bank of New York is a part of the São Paulo, Brazil-based Safra Group.

In its statement today, Safra noted that the agreement would see Bank Hapoalim’s qualifying clients and relationship managers in Luxembourg and Switzerland joining J. Safra Sarasin, and said it represented “another step forward…in the [Safra] Group’s strategy” of building its private banking presence in those markets in which “it has a long and successful track record”.

It added: “The acquisition further extends the worldwide wealth management business of J. Safra Sarasin Group, and enables the group to increase the market share of its business originating from Israel.”

The purchase price and other details of the acquisition weren’t given. Safra said it expected the deal to be completed during the course of the first half of 2018, subject to regulatory approvals and other conditions.

‘Call to improve risk management’

 

Today’s announcement of J. Safra’s plans to acquire Bank Hapoalim’s Swiss and Luxembourg private banking operations followed by a week a call by Israel’s Central Bank – which also acts as a supervisor of the Israeli banking sector – for Israeli lenders to reduce their overseas activities, and improve their risk management.

It also comes a week after a reports carried in such publications as the Times of Israel that some 150 Israeli and international companies, including Bank Hapoalim, have been told by the UN Human Rights Council that they may find themselves added to the council’s “blacklist” of firms operating in the West Bank, East Jerusalem and the Golan Heights —  which, under international law, are regarded as illegal settlements.

Last year, the UN council voted to publish a list of enterprises which have been seen to have benefited from the growth of Israel’s settlements.

Also, in a separate announcement today, Bank Hapoalim, which is based in Tel Aviv and listed on the Tel Aviv Stock Exchange, said that its settlement of a tax probe by the US authorities might end up coming in “significantly higher” than the US$200m (€170.3m) it had initially estimated the settlement would cost.

 

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