Dexia Israel (Public Finance) Ltd. (TASE:DXIL) overtook Bank Hapoalim (TASE: POLI; LSE:80OA) to become largest lender to local authorities in 2008. Dexia Israel overtook Bank Leumi (TASE: LUMI) in 2007, to reach second place, and last year it took the lead.
Dexia Israel is controlled by Franco-Belgian bank, Dexia (Euronext: DXB; LSE: DEX), and is managed by David Kapah. It increased its share of the local authority lending market to 34.2% in 2008 from 31.1% in 2007, after increasing credit by 23.8% to NIS 4.4 billion.
Total bank credit to local authorities rose 10.5% to NIS 12.9 billion in 2008 from NIS 11.7 billion in 2007. There was also an improvement in problem debt by local authorities, which shrank to NIS 376 million at the end of 2008 from NIS 462 million a year earlier, and from NIS 1 billion at the end of 2005. That said, there is a correlation between recessions and financial problems at local authorities, and if the current recession worsens, problem debt at local authorities will probably increase in 2009.
Bank Hapoalim increased its credit to local authorities to NIS 4.2 billion in 2008 from NIS 3.9 billion in 2007, but its share of the market fell to 32.4% from 32.8%. Bank Leumi reduced its credit to local authorities by 2.4% to NIS 3.2 billion in 2008, and its share of the market fell to 25% in 2008 from 30.5% in 2005.
Dexia Israel's share was unchanged at NIS 349.60 today, giving a market cap of NIS 263 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2009
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