Mizrahi Tefahot sells NIS 900m mortgage portfolio

Mizrahi Tefahot
Mizrahi Tefahot

Mizrahi Tefahot's sale continues a growing trend of cooperation between banks and financial institutions.

There has bene another mortgage deal between a bank and a financial institution, with Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) acquiring a mortgage portfolio from Mizrahi Tefahot Bank (TASE:MZTF) for NIS 900 million. Migdal will gain control of over 80% of the portfolio, while the bank maintains control over 20% and continues operation and management vis-à-vis debtors. This is a portfolio from 2014 with adequate loans, without arrears.

This is Mizrahi Tefahot's second deal in the field, after having sold a NIS 770 million mortgage portfolio to Menorah Mivtachim Holdings Ltd. (TASE: MORA) about six months ago. Mizrahi Tefahot is the biggest player in the field of mortgages, controlling over a third of the market.

A few months ago, Bank Bank Leumi (TASE: LUMI) also cooperated in the field mortgages with the Harel Insurance Investments and Financial Services Ltd. (TASE: HARL).

Head of Investments Division in Migdal Insurance Asaf Shoham said that "due to the low interest in the market, we seek to diversify our investment and fully utilize the investment potential in channels with a return which is preferable to tradables."

Mizrahi Tefahot responded by stating that "the deal corresponds with bank strategy to bolster cooperation with financial institutions, which will help the bank to continue with its growth and expansion policy, while meeting regulatory capital adequacy objectives."

Published by Globes [online], Israel business news - www.globes-online.com - on July 5, 2016

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

Mizrahi Tefahot
Mizrahi Tefahot
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