Israeli bank branch closures below int'l average

Bank Hapoalim
Bank Hapoalim

The Bank of Israel says 5% of branches have closed in the past 3 years, while the number of branches has doubled in Arab locations since 2004.

The Bank of Israel has today published a survey about the closure of bank branches in Israel as part of the annual Supervisor of Banks report. The report says that over the past three years 5% of the country's bank branches have closed leaving 1,152 branches.

In the past three years, some decline in the overall number of branches in Israel has been seen, though it is less of a decline than observed worldwide. The decline in Israel comes after seven years in which banking corporations opted to expand their branch network and increase their access to customers, primarily from the retail segments, and households in particular. The decline derives from the changes noted above in banking service consumption habits, resulting from new financial technology that allows the provision of banking products and services online. In addition, the decline also stems from processes aiming to increase efficiency being carried out by some banks."

The survey found that the number of branches in Israel today has returned to the level of six years ago and is 15% higher than the number of branches 10 years ago. Yesterday, "Globes' revealed the decline in the number of bank branches over the past few years as part of the streamlining process by Israel's major banks. The process is expected to continue over the next two years with dozens more branches shutting down.

The Bank of Israel also found that in the Arab sector there has been a sharp rise in the number of branches. "While the total number of branches declined in the past three years, the number of branches in Arab towns increased during that time. This increase is part of a long-term trend in the number of bank branches in Arab towns, and the number of banks operating in them. Between 2004 and 2015, the total number of branches in Arab municipalities increased by about 83%, compared with about 11% in Jewish municipalities and about 9% in mixed municipalities. As of December 2015, the number of branches in Arab towns was 108, compared with 58 in 2004, This change derives from business considerations and specific policy that led many banks to expand their retail activity in the Arab sector.

The report found that Bank Hapoalim (TASE: POLI) has doubled the number of its branches in the Arab sector since 2004 as did Mercantile Discount Bank. Bank Leumi (TASE: LUMI) operates in the Arab sector through the Arab-Israel Bank (merged last year with Leumi), and remains the largest bank in the Arab sector although its market share has been eroded due to the increased activity of its rivals. Mizrahi Tefahot Bank (TASE:MZTF) and Masad Bank, which had no branches in the Arab sector in 2004 are now operating in the sector.

Israel's outlying regions have seen their number of bank branches grow over the past three years by 30%.

Published by Globes [online], Israel business news - www.globes-online.com - on June 6, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Bank Hapoalim
Bank Hapoalim
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