Sources inform “Globes” that the Bank of Israel has approved the merger of United Mizrahi Bank (TASE: MZRH) and Tefahot Israel Mortgage Bank. Bank Tefahot acting CEO Israel Engel confirmed the report, saying that this approval was the final authorization necessary for the merger, following approval by the Antitrust Authority, the Israel Tax Authority, and the Ministry of Finance.
Engel said the stage was now set for the official merger to take place on January 1, 2005, when the two banks would be legally merged. Actual combining of activities between the two banks would begin on that date, with Tefahot Mortgage Bank offices being opened in most Mizrahi Bank branches. This will increase the number of Tefahot Mortgage Bank’s sales points by 50%.
At the same time, Tefahot Mortgage Bank’s branches will begin carrying out commercial banking operations, which will increase the number of Mizrahi Bank’s sales points. “The merged bank will have many more sales points,” Engel said.
Engel said that the bank was working on its branding in order to derive the maximum benefit from both the Tefahot Mortgage Bank and Mizrahi Bank brand names. “The chance that we will abandon either the Tefahot Mortgage Bank or the Mizrahi Bank brand names is nil,” Engel declared.
Regard the workers’ opposition to the merger, Engel said that no workers had been fired so far. Lay-offs will begin in January, and will proceed over eighteen months. He added that negotiations were currently underway with the workers, and described the results as “very slow progress, but progress nonetheless.”
Engel also said that, despite ongoing sanctions by Tefahot Mortgage Bank workers, which would seem to give the bank’s competitors an opportunity to increase their business its expense, Tefahot Mortgage Bank had increased its market share. “Bank of Israel figures show that Tefahot Mortgage Bank’s share of the housing mortgages market reached 26% in August, 27% in September, and 28% in October,” Engel claimed.
Published by Globes [online], Israel business news - www.globes.co.il - on December 16, 2004