The governance laws and the fear of the results of the legal revolution were expressed yesterday for the first time in an economic way that directly affects investors’ money. The shares of the five largest banks lost NIS 6.5 billion in value, after their stock index fell by 4.3% on the stock exchange. The total market value of bank shares fell below NIS 150 billion.
The shares of Bank Hapoalim, Bank Leumi and Bank Discount are held by the pension and provident funds for the general public. The declines were recorded even though there is no danger to the stability of the banks. The reason for the declines were the reports at the end of the week about deposit holders withdrawing money from the banks. At the weekend, a group of businessmen and bankers met with Prime Minister Benjamin Netanyahu, such as Bank Hapoalim CEO Dov Kotler, Bank Leumi Chairman of the Board Samar Haj Yahya (a neighbor of the initiator of the meeting, businessman Shlomi Fogel) and Discount Bank CEO Uri Levin.
At the meeting, Kotler reported that “there has been a withdrawal in recent days, not in large volumes and not from the high-tech industry, of deposit money from the banks.” Funds were also withdrawn from Discount and the bank’s CEO, Uri Levin, turned to Netanyahu and told him that “we cannot ignore all the economists who express concern about the moves. You must stop immediately and advance the changes by agreement.”
In the meantime, Kotler left towards the end of the week for London (a one-day visit) and New York (a two-day visit) for reassuring talks with investors. This is how “Maariv” learned. The visit was originally scheduled a month ago as part of the regular meetings held by the bank with the shareholders. Bank Hapoalim shares are distributed in the public and the bulk of them are held by foreign investors. In light of the news about the judicial revolution and the fear of damage to the economy, the need arose to hold clarification talks with the bank’s shareholders.
The largest shareholder in Bank Hapoalim is Sherry Arison, who was previously the controlling shareholder. Today she owns about 5% of the bank’s shares. A major shareholder in Bank Leumi is the businessman Aharon Frankel, who bought 2.5% of the bank’s shares six months ago as part of a NIS 1 billion raised by the bank through a share issue.
Frankel was convinced by the bank’s CEO Hanan Friedman (who did not attend the meeting with Netanyahu) to make the investment. According to estimates, Frankel is currently losing an estimated NIS 150 million on his investment.