Minister of Finance Benjamin Netanyahu is expected to propose only a short extension of Bank Hapoalim’s (LSE:BKHD; TASE:POLI) permit to control Bank Otsar Hahayal.
Netanyahu wants to demand that Bank Hapoalim sell its holdings in the bank, and extend its permit if the sale is unsuccessful. Netanyahu is anxious to avoid an automatic two-year extension.
Under a decision by the previous government, Bank Hapoalim is entitled to retain control of Bank Otsar Hahayal until the end of 2003. A month ago, the Ministry of Finance and the Bank of Israel jointly decided to extend the permit of Bank Hapoalim, which had not found a buyer. Two week after that, Netanyahu contacted Governor of the Bank of Israel David Klein, and expressed opposition to the extension, saying that Bank Hapoalim had to sell Bank Otsar Hahayal.
Klein told Netanyahu that Bank Otsar Hahayal could not be sold by the end of the year. The two decided against granting Bank Hapoalim an automatic two-year extension until the end of 2005.
The Ministry of Finance hopes to push Bank Hapoalim into selling Bank Otsar Hahayal. If these efforts are unsuccessful, Bank Hapoalim will be granted a limited and conditional extension. The permit is likely to be open, temporary, or for a fixed period. For example, if a buyer is found, the extension is likely to be shortened. The permit may set requirements for Bank Hapoalim, should conditions favor a sale.
Since Bank Hapoalim’s current permit is valid until December 2003, Netanyahu has until that time to submit his proposal.
Published by Globes [online] - www.globes.co.il - on August 6, 2003