Bulletin: Bank Leumi's Disposal Of Its U.S. Subsidiary Reduces Operational Risk

MILAN (S&P Global Ratings) Sept. 27, 2021--S&P Global Ratings said today that the agreement by Israel-based Bank Leumi le-Israel B.M. (Leumi) to sell 85% of its subsidiary, Bank Leumi USA, to U.S.-based Valley National Bank (Valley) will reduce operational risk for Leumi. This risk arises from running international businesses amid the tightening of cross-border regulations. However, the sale will not represent a complete exit for Leumi from the U.S. market. On completion of the transaction, Leumi will hold about 14.2% of Valley, and it aims to cooperate with the U.S. group to serve the U.S. operations of large Israeli companies that are important Leumi customers. It remains important for Leumi to have a presence in the U.S. because of the

...September 27, 2021 MILAN (S&P Global Ratings) Sept. 27, 2021--S&P Global Ratings said today that the agreement by Israel-based Bank Leumi le-Israel B.M. (Leumi) to sell 85% of its subsidiary, Bank Leumi USA, to U.S.-based Valley National Bank (Valley) will reduce operational risk for Leumi. This risk arises from running international businesses amid the tightening of cross-border regulations. However, the sale will not represent a complete exit for Leumi from the U.S. market. On completion of the transaction, Leumi will hold about 14.2% of Valley, and it aims to cooperate with the U.S. group to serve the U.S. operations of large Israeli companies that are important Leumi customers. It remains important for Leumi to have a presence in the U.S. because of the economic, political, and historical ties between the U.S. and Israel. We still expect Leumi's risk-adjusted capital (RAC) ratio to be about 10.5%-11.0% in 2022-2023, compared with 10.5% as of December 2020, even though the immediate...

Bulletin