Tadmor to Leumi, Discount Banks: Dissolve Partnership in Visa by End ’99

Bank Leumi, which holds 66% of shares: We have no intention of selling our bloc. Discount Bank, which holds 43%: We will consider steps close to stated date.

Restraint of Trade Commissioner Dr. David Tadmor today informed bank Leumi and Discount Bank that they must dissolve their partnership in Visa ICC by the end of 1999. This is the first publication of the commissioner’s position concerning relationships between banks in ancillary corporations. The announcement was included in Tadmor’s permit for Alpha Card’s launch of operations.

The two banks recently received a permit from the Supervisor of Banks to continue their relationship for one year. Bank of Israel’s position is that the future of the relationship will be determined according to the development of competition in the credit card market. Tadmor noted that the joint Bank Leumi - Discount Bank ownership of Visa ICC will be dissolved using the "exemption" condition. One of the parties will be asked to sell its holdings no later than the end of 1999.

Bank Leumi stated in response that it had no intention to sell its shares and the problem was with the corporation that holds less than 50% of the ancillary corporation. Bank Leumi holds 66% of Visa CCL, while Discount Bank holds the rest. Discount Bank stated it will consider steps close to the date Tadmor mentioned.

Published by Israel's Business Arena July 7, 1998

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