Bank of Israel Allows Institutions to Boost Bank Holdings

Israel’s central bank increased the maximum number of shares financial institutions can hold in the country’s lenders, prompting bank stocks to surge the most in 10 months.

Investment houses such as provident funds and insurance companies can now own as much as 7.5 percent of a bank’s shares, compared to the previous cap of 5 percent, the Bank of Israel said in an e-mailed statement.

The decision was in response to concerns raised by investors that the previous limit adversely impacts the market value of lenders’ shares, the central bank said.

Raising the threshold “will enable the general public to increase its investment in bank shares through the institutions managing its money,” said Hedva Ber, the supervisor of banks.

The Tel Aviv Banking Index jumped 3.9 percent, the most since August, to 1,334.31 at 3:34 p.m. local time. Bank Hapoalim BM, the country’s largest lender, rose 4.1% to the highest level since January 6.

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