US private equity firm Warburg Pincus has said that it plans to invest NIS 800 million ($221 million) over the next five years to expand its new Israeli credit card business, "Reuters" reports.
Warburg Pincus European investment head Daniel Zilberman told a Bank of Israel conference that the investment will be used to expand Leumi Card, rebranded as Max, into areas of lending dominated by Israel's banks. Zilberman said that he wanted to offer credit to more consumers, as well as small and medium sized enterprises (SMEs). This is an area dominated by Israel's banks.
Zilberman said, “We believe that (MAX) can be an innovator and add to competition.
However, he added that it will take time since MAX will have to find third party funding. “We are no longer a bank-owned company funded by Bank Leumi,” he said.
Earlier this year, Warburg Pincus acquired Leumi Card from Bank Leumi (TASE: LUMI) and Azrieli Group Ltd. (TASE: AZRG) for NIS 2.5 billion shekels. This follows the implementation of the Strum Committee report, which recommended splitting the credit card companies from the banks in order to enhance competition in the credit market. Warburg Pincus has since rebranded Leumi Card as Max.
Published by Globes, Israel business news - en.globes.co.il - on April 3, 2019
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