Israel Discount Bank (TASE: DSCT) CEO Giora Ofer told the board of directors yesterday that he will leave his post when his contract expires at the end of January 2011, and that he will not respond to requests to stay on. He has been CEO of the bank for the past ten years.
In his first public response to Ofer's resignation, Discount Bank chairman Yossi Bachar said today, "I wish every chairman had a CEO like Ofer. Working with him is fully open and with clear rules of the game."
Bachar told the board of directors at its annual meeting, "The CEO decided to resign after ten years. There's no drama here." He added, "We're setting up a search committee, and we'll work according to procedure. We intend to learn from the experience of others. Candidates will come from both within the bank and outside of it."
Bachar said that it was clear that the new CEO would have to be acceptable to the bank's shareholders.
Commenting on the role of the board of directors, Bachar said that its job was growing stronger, but that regulatory developments were bypassing the tools in his possession. "Ostensibly, there's a single body that supervises the banking system. I haven’t seen supervision so tight, and so good."
Bachar refered to Ofer's resignation, saying, "Commenting on yesterday's incident, I cannot imagine that something like this should come as a surprise"
In an update on Discount Bank following Ofer's resignation, Meitav Investment House analyst Terence Klingman said, "We expect a strategic change at the bank, with an emphasis on dividends over growth."
Klingman expects changes in three areas: meticulous management of the capital base and restrained growth in credit; the sale, spinning off, or floating of subsidiaries; and a more assertive attitude toward the bank's workers committee in order to reduce salary costs.
Klingman reiterated his "Market perform" recommendation for Discount Bank with a target price of NIS 8.30.
Discount Bank's share price rose 3% by midday today to NIS 6.57.
Published by Globes [online], Israel business news - www.globes-online.com - on July 6, 2010
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