Clo­sures of Is­raeli bank branches be­low int’l av­er­age

The Jerusalem Post - - BUSINESS & FINANCE - • By IRIT AVISSAR

Over the past three years, 5 per­cent of the coun­try’s bank branches have closed, leav­ing 1,152 branches, the Bank of Is­rael re­ported Mon­day as part of the an­nual Su­per­vi­sor of Banks Re­port.

“Over the past three years, some de­cline in the over­all num­ber of branches in Is­rael has been seen, although it is less of a de­cline than ob­served world­wide,” the re­port said. “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... 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 has re­turned to the level of six years ago and is 15% higher than the num­ber of branches 10 years ago. The de­cline in the num­ber of bank branches over the past few years is 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 over the past three years, the num­ber of branches in Arab towns in­creased dur­ing that time,” the re­port said. “This in­crease is part of a longterm 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.”

Bank Hapoalim and Mer­can­tile Dis­count Bank have both dou­bled the num­ber of their branches in the Arab sec­tor since 2004, the re­port said. Bank Leumi op­er­ates in the Arab sec­tor through the Arab-Is­rael Bank, which merged last year with Leumi. It 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 and Bank Mas­sad, which had no branches in the Arab sec­tor in 2004, are now op­er­at­ing there.

The num­ber of bank branches in Is­rael’s out­ly­ing re­gions has in­creased over the past three years by 30%, the re­port said.

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