Bank Hapoalim Credit Card Unit Said Valued at Near $1 BillionBy
Hapoalim and rival Leumi said to create teams for sale
Isracard could fetch ~$1b, Leumi Card $700m: people familiar
Bank Hapoalim Ltd.’s credit-card unit may be valued at about $1 billion as the lender prepares to divest the business to comply with new Israeli regulations, according to people with knowledge of the matter.
The Tel Aviv-based bank and smaller rival Leumi Le-Israel Ltd are both meeting with investment banks about the sale of their credit card units, the people said, asking not to be identified as the talks are private. Leumi Card Ltd. could be valued at about $700 million, one of the people said.
After delaying the sales while they waited for clarity on the new law, the banks now have created internal teams to oversee the disposals, the people said. The law forces Hapoalim and Leumi to sell credit card units that account for about 10 percent of each bank’s revenue. The law passed last month based on the recommendations of a committee headed by former antitrust chief Dror Strum.
"The bank has a team, headed by the chief executive officer, that has been dealing with the Strum Committee for the past two years," Ofra Preuss, Hapoalim’s spokeswoman, said by e-mail. "The team holds numerous meetings with entities relevant to the matter."
Bank Leumi declined to comment.
The forced sale of Isracard and Leumi Card is the cornerstone of reforms that Israeli lawmakers say are key to reducing fees to consumers. The government is offering incentives to convert these businesses into traditional banks that one day will compete with their former owners. Global investment banks have expressed interest in these assets, Israel’s chief banking regulator said last March.
The Bank of Israel instructed Hapoalim and Leumi on Nov. 17 to change the boards of their card units to avoid any conflicts of interest during the sale process. The banks have until 2019 to sell the credit card businesses.