BoI demands Mizrahi Tefahot set aside $100m for US probe

Mizrahi Tefahot Photo: Eli Yizhar

The Supervisor of Banks demanded an increase in the provision  even before the "offer" by the US investigative agencies to settle the affair for a $342 million payment.

The management of Mizrahi Tefahot Bank (TASE:MZTF) plans to decide very soon whether to publish its report for the second quarter this week as planned or to postpone it until next week. The bank is legally required to publish the report by the end of the month. The sole consideration is the provision in the report for the US investigation against Mizrahi Tefahot Bank. The decision must be coordinated with Supervisor of Banks Hedva Ber.

As far as is known, the Supervisor of Banks is demanding a more substantial provision than that planned by the bank's management, headed by CEO Eldad Fresher. Ber demanded an increase in the provision for the quarter even before the "offer" by the US investigative agencies to conclude the affair in return for a $342 million payment. The provision that Ber is demanding, however, became much larger after the proposed settlement arrived last week - a proposal rejected out of hand by Fresher with backing from Mizrahi Tehot Bank's management and board of directors.

While the bank wants to make a provision in the low tens of millions of dollars, at most doubling the particularly modest $46 million provision made to date, Ber is demanded that Mizrahi Tefahot Bank's provision make a provision of nearly $100 million, at least twice as much, all in the second quarter. The Supervisor of Banks is also demanding that the bank begin planning a provision in the coming quarters, regardless of the negotiations being conducted by the bank with the US Department of Justice.

Published by Globes [online], Israel business news - www.globes-online.com - on August 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Mizrahi Tefahot Photo: Eli Yizhar
Mizrahi Tefahot Photo: Eli Yizhar
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