Barclays Bank to open first Israeli branch

A source close to the process told "Globes" that Barclays has no plans for retail banking.

Sources inform ''Globes'' that Barclays Bank plc (LSE: BARC), one of the world's most important banks, is opening a branch in Israel. Last month, Barclays' representatives submitted the necessary paperwork to the Bank of Israel Banking Supervision Department, and approval is expected quickly.

Barclays intends to focus on corporate banking, especially for large companies with a turnover of more than $100 million, and private banking for premium customers who manage assets worth more than $2.5 million.

A source involved in the process told "Globes" that Barclays has no plans to engage in retail banking. A foreign bank has a major advantage in corporate credit over local banks, since it has no effective single borrower or borrower group restrictions.

Barclays, founded in 1690 and with a market cap of $54 billion, is one of the most important banking groups in the world. The bank is engaged in retail banking, corporate and commercial banking, credit cards, investment banking, and customer asset management. Barclays has 147,000 employees, 48 million customers, and a presence in 58 countries, mainly in Europe and Asia. The bank is headquartered in London.

Barclays' business in the US soared after it acquired the asset management division of Lehman Brothers, following its bankruptcy. Barclays operated in Israel until 1993, when it was a partner with Israel Discount Bank (TASE: DSCT) in Bank Barclays Discount, now Mercantile Discount Bank.

Barclays Capital, the investment arm of Barclays Bank, has operated in Israel since late 2008, following the acquisition of the Israeli representative of Lehman Brothers. Len Rosen heads the Israeli representative office. Barclays Capital's representative office is dominant in Israel and it is considered the main investment bank for advising on transactions and mergers and acquisitions.

Barclays Capital CEO Robert Diamond is slated to become Barclays Bank CEO next April.

18 months ago, Barclays Capital set up bond trading activity in Israel and became a market maker in the government bond market. For this purpose, it overnight it took over the entire foreign currency and bond trading team of Deutsche Bank by offering much better employment terms.

Representatives of 20 foreign banks currently operate in Israel, including Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ), Deutsche Bank AG (NYSE: DB, XETRA: DBK), UBS AG (NYSE; SWX: UBS), and Union Bancaire Privée (UBP). However, only four foreign banks have an Israeli banking license: Citigroup Inc. (NYSE: C), HSBC Holdings plc (LSE: HSBA; HKSE: 005; NYSE, Paris: HBC), BNP Paribas (Euronext: BNP), and the State Bank of India, which only operates in the diamond market.

Published by Globes [online], Israel business news - - on October 17, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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