Israel Discount Bank (TASE: DSCT) is readying itself take charge of the former customers of Bank Yahav For Government Employees Ltd. The bank will invest NIS 22.5 million in the setting up of banking services for civil servants. It will open an additional six branches in ministry buildings and hospitals by the beginning of 2008, and it will adapt its IT systems accordingly.
Several weeks ago, Discount Bank won a Ministry of Finance Accountant General tender for the provision of loans, overdraft facilities and banking services to public sector employees, services which were previously provided by Bank Yahav. Mizrahi Tefahot Bank (TASE:MZTF) acquired the controlling stake in Bank Yahav before the tender.
Discount Bank won the tender after it offered to deposit NIS 1.04 billion with the accountant general for a seven-year period, as a fund from which to finance employee loans, which will amount to a 40% subsidy of the loans currently provided by the state. Discount Bank signed the agreement with the Finance Ministry at the beginning of the month.
Discount Bank general manager Giora Ofer told "Globes", "We have won a tender to begin providing services to public sector employees, starting from January 2008. During the next seven years, any employee who wants a subsidized loan can get it solely at Discount Bank."
Ofer added that Discount Bank had a proven track record in finding private customers. "Every year, an extra 100,000 customers will visit Discount Bank's branches, and when they arrive, we can raise a substantial portion of the funds from them as bank customers. This is a significant project in retail banking, possibly the last opportunity around, and we're building on it."
Published by Globes [online], Israel business news - www.globes.co.il - on May 30, 2007
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