Leumi Drops as IBI Says Eliahu Sold Shares: Tel Aviv Mover

Bank Leumi Le-Israel Ltd. (LUMI) headed for the biggest drop in a month after IBI-Israel Brokerage & Investments said Shlomo Eliahu sold the stock and as Israel’s biggest lender reported its first quarterly loss since 2008.

Shares of the bank fell 2.8 percent, set for the largest retreat since Feb. 21, to 12.75 shekels at 3:12 p.m. in Tel Aviv on volume of 4.6 times the three-month daily average, data compiled by Bloomberg show. Bank Leumi was the third-biggest decliner on the benchmark TA-25 Index (TA-25), which lost 0.5 percent.

Businessman Shlomo Eliahu sold about 37 million shares at 12.75 shekels a share, IBI said in an e-mailed note today. The move comes after Eliahu was asked by the Bank of Israel in October to sell his entire holding in the lender within three years in exchange for being allowed to acquire a majority stake in Migdal Insurance & Financial Holding Ltd. (MGDL), which owns a stake in Bank Leumi.

“Leumi’s share is down due to a combination of factors including Eliahu selling part of a stake in the company, according to press reports,” Zach Herzog, head of international sales at Psagot Investment House Ltd., said today by phone. “The net loss for the fourth quarter was higher than the guidance given and provisions were higher than what the market had forecast.”

A spokesman for Eliahu didn’t immediately answer a text message from Bloomberg News today seeking comment. Eliahu already sold 200 million shares in Bank Leumi at 12.25 shekels a share in October, IBI said at the time.

Last Loss

The Tel Aviv-based bank, which has the fifth-biggest weighting on the TA-25, also reported a fourth-quarter loss of 259 million shekels ($70 million), the first time it hasn’t turned a profit since the final three months of 2008, data compiled by Bloomberg show. Bank Leumi warned earlier this month that it would report a provision to cover costs related to an investigation by U.S. authorities of clients’ tax evasion.

The fourth-quarter loan loss provision was 386 million shekels compared with 385 million shekels in the comparable period. Excellence Investments Ltd (EXCE) analyst Micha Goldberg estimated a provision of 364 million shekels, according to data compiled by Bloomberg.

Total assets of Leumi on Dec. 31 totalled 376.2 billion shekels, up 2.8 percent from 365.9 billion shekels from the previous year, according to bank data. Net return on equity for 2012 was 3.8 percent. The bank’s capital adequacy ratio reached 14.87 percent of which the core capital ratio was 8.55 percent.

To contact the reporters on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net; Robert Lakin in Tel Aviv at rlakin1@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net