The Defense Ministry is publishing tenders for bank branches at IDF bases and for the right to extend loans to soldiers.
Following the resolution of the battles over mortgages and government employees, the next battle in Israel's banking sector will be for IDF customers between Israel Discount Bank (TASE: DSCT) and First International Bank of Israel (TASE: FTIN1;FTIN5) subsidiary Bank Otsar Hahayal Ltd.. The two banks are expected to participate to engage in a head-to-head confrontation in a tender for the right to extend special bank loans and specific services to IDF personnel.
The Ministry of Defense will publish the tender in May, and the winner will be announced in January 2009. Bank Otsar Hahayal currently provides these services, but its franchise expires in December.
The Ministry of Defense will also publish a complementary tender for the leasing of real estate assets on IDF bases currently occupied by 14 Bank Otsar Hahayal branches. The winner in this tender will receive the premises and undertake to operate them as bank branches. If Bank Otsar Hahayal loses the tender, it will lose a third of its branches.
Banking sources believe that Discount Bank will aggressively bid in the tender in order to recruit regular IDF officers and NCOs as customers.
Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2008
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