Hapoalim deal for Ukrainian bank fizzles

Bank of Israel rejects plan to buy won't be buying Ukrainian Innovation Bank.

By SHARON WROBEL
October 27, 2008 09:15
1 minute read.
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The Bank of Israel has nixed Bank Hapoalim's plan to buy a Ukrainian bank. "Late Thursday evening, the governor of the Bank of Israel canceled the permit for the purchase of Ukrainian Innovation Bank [also known as Ukrinbank] because of recent economic developments in global financial markets and concerns regarding the impact on financial institutions around the world," Bank Hapoalim said in a statement to the Tel Aviv Stock Exchange on Sunday. Last December, Bank Hapoalim agreed to buy a 75.8 percent stake in Ukrinbank through Tarshish Ltd., a wholly owned subsidiary, for $136 million, valuing the whole bank at $180m. "The move shows that the central bank's supervision of banks is taking early steps to avert any increase in risk exposure and in this case it is Bank Hapoalim," said Yuval Ben-Zeev, head of Clal Finance Brokerage's research division. "The central bank's message is 'watch your money,' [and] this is the central role of the supervision of banks." Hapoalim originally had said the planned acquisition of Ukrinbank was part of its strategy to increase its international activities to one-third of its total banking operations. Ukrinbank was founded in 1989 and is the country's oldest private bank. Headquartered in Kiev, it has 30 branches and more than 100 outlets across 24 districts in the Ukraine. Last November, Hapoalim received regulatory approval to acquire control of Kazakhstan's Demir Kazakhstan Bank through a Turkish bank in which it had bought a majority stake in February.

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