Hapoalim lambasts attempt to limit banks from pension sales

Claims that the delay caused by the insurance supervisor in allowing the large banks to enter the pension market would damage the economy and the public's interests.

zvi ziv 298.88 (photo credit: Ori Porat)
zvi ziv 298.88
(photo credit: Ori Porat)
Bank Hapoalim's CEO on Tuesday harshly attacked the insurance supervisor, claiming that the delay he was causing in allowing the large banks to enter the pension market would damage the economy and the public's interests. "The initiative by the Finance Ministry's Supervisor of Insurance and Capital Markets Yadin Antebi to limit the banks' service on pension consultation to the self-employed and to delay the entry of the two large banks into pension consultancy is an example of erroneous regulation, which is bound to significantly damage the economy and the public in the long-term," the bank's Chief Executive Officer Zvi Ziv, said at the Herzliya Conference, speaking on "Israel's Financial Strength Following the Bachar Reform." Ziv's remarks were part of the big banks' attack on Antebi, who allegedly intends to postpone the entry of the two large banks - Hapoalim and Bank Leumi - into the pension consulting business. The banks fear Antebi might refuse to grant them licenses to provide pension advice, which in turn is meant to give the medium-sized and small banks an advantage in entering the market. Ziv claimed that the initiative undermined the principles of the Bachar reform, which forced the banks to sell their holdings in provident and mutual funds, but was in turn supposed to allow them to start selling advice on pension savings. "The banks did cooperate and they did sell their holdings in investment funds," said Prof. Amir Barnea, founding dean of the Arison School of Business, IDC Herzliya. "The banks sold investment funds that manage about NIS 300 billion and the overall sale amounted to about NIS 7b. The banks gave up on yearly management fees of NIS 2b." Looking ahead, the big banks' growth strategies were based mainly on expanding their international operations and on starting to provide pension advice, in which they claim they have already invested millions of shekels in preparation. "Is it fair, that we are suddenly told that the rules of the game have changed after we quickly sold off the provident and mutual funds, and after we invested NIS 50 million in preparation for selling pensions at our 250 branches?" said Ziv. "Antebi's initiative is changing the rules of the game after the game already started." Antebi's move, Ziv remarked, would leave pension consultancy in the hands of the insurance companies, which are not objective, while the small and medium-sized banks would not succeed in effectively competing with them. "The move will reduce the availability of professional and honest advice in the pension sector available to the public and hurt residents of the periphery," he said. "What will happen to the residents of Sderot and Mitzpe Ramon, for example, which only have branches of Hapoalim and Leumi?"