Sources inform ''Globes'' that First International Bank of Israel (TASE: FTIN1;FTIN5) subsidiary Ubank Ltd. is considering the sale of its mutual funds and portfolio management business.
The bank is currently reviewing an offer made by the representative of a party who prefers to remain anonymous.
New Hamashbir Lazarchan Ltd. (TASE:MSZB) chairman Rami Shavit denies reports that he is behind the offer.
Ubank currently has NIS 700 million in mutual funds and a similar amount of assets in its portfolio management business.
Under the Bachar capital market reforms, Ubank has to sell its mutual funds by August 2013. Banks can continue with their portfolio management business for customers, but under restrictions that limit a bank's ability to grow and take advantage of its ties with customers. For this reason, Bank Leumi (TASE: LUMI) decided not to resume portfolio management after selling its business to Psagot Investment House Ltd. in 2006.
On the basis of the usual market prices for mutual funds and portfolio management, the value of these activities of Ubank is about NIS 20 million. At this price, the bank could report a one-time capital gain of NIS 12 million, amounting to a fifth of its annual profit.
Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010