Isracard is expected to make inroads among the bank’s customers.
First International Bank of Israel (TASE: FTIN1;FTIN5) has notified Israel Credit Card-CAL Ltd. (ICC-Cal) (Visa) that it will cancel its agreement and stop giving preference to ICC-Cal in the marketing of credit cards to the bank’s customers. The move follows the bank’s acquisition of Bank Otsar Hahayal Ltd.. Under the agreement, First International Bank is required to give ICC-Cal six months advance notice, which means that the preferred marketing of Visa credit cards will end in mid-February 2007.
First International Bank, run by CEO David Granot, also asked ICC-Cal to open expedited negotiations as soon as possible for a new contract that will be based on existing contracts, but without the preferred marketing clause. The bank owns 26.8% of ICC-Cal.
The cancellation of First International Bank’s preferred marketing agreement with ICC-Cal was one of the clauses in its contract to acquire Bank Otsar Hahayal from Bank Hapoalim (LSE: BKHD; TASE: POLI). The contract stipulated that First International Bank will give preference to Isracard, a wholly owned subsidiary of Bank Hapoalim, but only at the customer’s preference. However, Antitrust Authority director general Ronit Kan made her approval of this clause subject to Isracard not receiving exclusive access to First International Bank customers, or banning First International Bank from marketing other credit cards. Isracard is nevertheless expected to make inroads among the bank’s customers.
Published by Globes [online], Israel business news - www.globes.co.il - on September 3, 2006
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