Bank Hapoalim unveils plans to regain market leadership

"For us, 2010 is a year in which we return to a trajectory of growing revenues and improving profitability," says chairman Yair Seroussi.

Hapoalim (photo credit: Ariel Jerozolimski)
(photo credit: Ariel Jerozolimski)
Bank Hapoalim, the country's second largest bank,is embarking on a three-year plan to improve profitability, whilestrengthening its retail and corporate activities in an effort toregain its leadership position as the country's largest bank.
"Forus, 2010 is a year in which we return to a trajectory of growingrevenues and improving profitability. I am certain that theimplementation of our strategic plan will enable the bank to solidifyits leadership in Israeli banking," said Bank Hapoalim chairman YairSeroussi. "This year, we will continue to strengthen our leadership inretail and corporate banking in Israel; stand by our customers and helpthem grow; focus our international operations and continue to build theinfrastructure for future growth; maintain the bank's level of capitaladequacy above the regulatory requirement; and devote special attentionto risk management."
In its 2010-2012 work plan, approved by the Board of Directorson Sunday, the bank said that Israel was one of the countries where theimpact of the crisis was relatively minor, thanks to the government'sprudent fiscal policy, the monetary leadership of the Bank of Israel,and a robust, conservative banking system.
"All of these factors enabled the Israeli economy to start 2010on a positive note. Of course, we are aware of the remaining risks inthe financial systems in the United States and in most Europeancountries, and we recognize that full employment in the developedcountries is still a long way off," said Seroussi. "For all of thesereasons, we believe it is prudent to maintain a cautious andconservative business policy."
In 2010, the bank also plans to focus oninternational operations in an effort to build the infrastructure forfuture growth, maintain a level of capital adequacy above theregulatory requirement of 12 percent, and devote special attention torisk management.
"Bank Hapoalim has experienced two difficult years during whichthe bank has lost its leadership to Bank Leumi," said Yuval Ben-Zeev,analyst at Clal Finance Brokerage. "2010 opens for the bank as a yearwith a focus on rebuilding its position and a return to the center ofthe stage as the leading bank in Israel. Bank Hapoalim wants to winrenewed trust of customers, businesses and the central bank'ssupervision."
Inthe retail sector the bank plans to expand its branch network inresponse to customers' needs, with new branches in a variety of formatstailored to different segments of the population, taking into accountthe demographic shifts in the Israeli population.
"We will continue to improve customer service, making use ofnew technologies, with special emphasis on providing advisory services,strengthening long-term saving habits, and increasing our market sharein mortgages with a focus on customers of the bank," said the bank'sCEO Zion Keinan.
"We also plan to take our activity to the nextlevel in the middle market business sector, which is an importantcomponent of the backbone of the Israeli economy. We see potential forsignificant expansion of the bank's business in this area, based, amongother factors, on the new infrastructure of business branches, which wewill continue to grow over the coming years."
Ben-Zeev noted that two years ago, Bank Hapoalim took astrategic decision to focus on the middle market business, in which ithas a market share of 25% compared with Bank Leumi's 40% share.
"We expect Bank Hapoalim's work plan to create fiercecompetition in the banking sector as other banks will respond to theaggressive steps the bank is planning to take," said Ben-Zeev.