Bank Hapoalim, one of Israel’s largest banks, has announced the closure of its UK branch -which holds the UK private banking division – according to Israeli newspaper Hareetz.
The decision to close the London-based private banking operations (known as Bank Hapoalim International, or BHI) comes under the strategy formulated by its chairman Yair Seroussi.
The strategy will force the bank to focus on its core business and cease its overseas expansion, while focusing on corporate accounts in the US and "private accounts for well-heeled clients" in other nations, said Hareetz.
In July 2012 Bank Hapoalim announced plans to shut its Singapore branch-which focused on private banking- five years after its opening, as part of a restructure of its business operations in the Far East.
PBI contacted Bank Hapoalim for comment but had yet to receive a response at the time this story was posted.
Surprising new strategy
According to the newspaper, the decision to close the London branch came as a surprise: the board’s third quarter reports for 2012 indicated the bank’s will to expand operations in the UK branch.
The report read, "The [UK] group is a key element in the implementation of the bank’s growth strategy abroad."
The private banking activities in the UK recorded net profits of £1m (for the three months ended in September 2012), indicating a 33% decline in net profits since the second quarter when the bank recorded £1.5m (for the three months ended June 2012).
The bank recorded total assets under management of NIS152.6bn ($39bn) for the three months ended September 2012 for the whole private banking activities.
Third to quit
Hapoalim is the third Israeli bank to shrink its private banking operations in London, after First International Bank of Israel (Beinleumi) announced in August 2012 it was leaving the UK.
Bank Discount also shut down its private banking operations in London.