Supervisor of Banks Yoav Lehman today cancelled Euro-Trade Bank’s banking license. The announcement follows Euro-Trade Bank’s announcement from February 2005 that it intended to cease functioning as a bank, while continuing to operate as a private investment house. With this measure, Euro-Trade Bank has completed a two-year process of reducing its banking activities, which was closely coordinated with the Supervisor of Banks.
In addition to reducing its credit and other banking activities, Euro-Trade Bank repaid all public deposits in recent months, except for a few accounts of depositors who consented to keep their money at the bank, which will continue operating as a private investment house.
Euro-Trade Bank cessation of banking activities conforms with the Bank of Israel Banking Supervision Department’s policy that an organized withdrawal of small banks, which struggle to maintain profitable and safe banking activities, from Israel’s banking system was advisable. These banks’ small capital foundation prevent the development of business on a scale that would cover the large overheads necessary for maintaining modern banking administrative and monitoring systems, as well as generating large profits for the banks’ owners.
Lehman’s office said the closing of small banks in Israel did not harm competition in the banking system, because their contribution to competition was negligible.
Published by Globes [online], Israel business news - www.globes.co.il - on July 11, 2005