J. Safra Sarasin is set to acquire the Swiss and Luxembourg private banking business of Israel’s largest lender, Bank Hapoalim, the Swiss group announced today.
As part of the agreement, Bank Hapoalim’s qualifying clients and relationship managers in Luxembourg and Switzerland will join J. Safra Sarasin. Further terms of the acquisition have not been disclosed and it is still subject to regulatory approval.
Bank Hapoalim’s decision to withdraw from Switzerland marks an unexpected turn of events, considering that it has confirmed its presence in the Swiss market just last year.
However, just last week, presumably after Hapoalim’s decision, the Israeli Central Bank, which also acts as a supervisor of the Israeli banking sector, called on Israeli lenders to reduce their overseas activities and improve their risk management.
Moreover, as the Times of Israel revealed last week, Bank Hapoalim is one of 150 Israeli and international companies which received a letter from the UN Human Rights Council threatening to add them to its blacklist of firms operating in the West Bank, East Jerusalem and the Golan Heights, which according to International Law, constitute illegal settlements.
Last year, the UN Human Rights Council voted to publish a list of enterprises which have enabled from or profited from the growth of Israel’s settlements.
In addition to growing political pressures, Bank Hapoalim also announced today that its settlement of a tax probe by US authorities might be ‘significantly higher’ than the USD200m (€170.3m) it initially budgeted.
There has been a longer process of consolidation in the Swiss private banking sector, with a number of international banking groups either closing or selling their presence in the Swiss market.
In 2015, J. Safra Sarasin already took over Israeli Bank Leumi’s Swiss clients for CHF3.5m (€3.01m), while Geneva-based Hyposwiss took over Israel Discount Bank’s Swiss business for CHF10.9m (€9.5m).