Hapoalim Chairman Comments on Challenges, Growth Possibilities

Bank Hapoalim Ltd. Chairman Yair Seroussi discusses the challenges this year amid a global economic slowdown. He also commented on the possibilities for growth and the impact of the government initiative to get conglomerates to sell off assets and increase market competition.

On economic growth:

“The main challenge is going to be growth, because banks are linked to growth in gross domestic product and the economy, and we see slower growth in Israel expected this year.”

“This year, 2012, we see growth of 3 percent influenced from different reasons, including of course, worldwide and European effect on the economy. This is the number one challenge. How do you grow and continue to grow in a general environment which is slower?”

On possibility for growth:

“The strategy of Bank Hapoalim, which started three years ago, was looking for areas of growth which are faster than the GDP.”

“For example, the Arab sector. We spent a lot of time increasing the the coverage we had in the Arab sector, believing that with the growth in education, having so many more students, more doctors in this segment, we will see more and more income and more transactions for the banking sector.”

“Another sector that is growing faster than the economy and will compensate us is the ultra-religious sector. We see here a change as well. More and more women that are working and more educated. We see more in the high-tech sector coming from the ultra-religious sector. We think there is a certain revolution here that brings potential for growth.”

“Another sector we are after is small- to mid-sized companies where we can improve the market share of Hapoalim.”

On the government initiative:

“If it will be done gradually and in a way that will not risk the companies and will be done in a way that in the end we will see more and more owners, of course, long term, it will be good for the portfolio of the banks.”

“The banks, and us as well, are looking to diversify portfolios and ownerships, so in the long term I think it could be good for the banks as well.”

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