First Int'l Bank aims for TA 25 Index

First International Bank of Israel (TASE: FTIN1;FTIN5) is moving to join the Tel Aviv 25 Index. Sources inform ''Globes'' that, after Israel Discount Bank (TASE: DSCT) begins the sale of its 26.45% stake in First International Bank. First International Bank will consolidate its two share issues, which will make it eligible for the blue-chip index.

The capital consolidation will automatically increase the liquidity of First International Bank's share, and it should also boost the bank's market cap. The bank has not yet begun the share consolidation process, but it is a technical process that is considered fairly straightforward, and the bank is expected to join the Tel Aviv 25 Index as early as the next resetting of the index components in June.

Zadik Bino, who controls First International Bank through FIBI Holdings Ltd. (TASE: FIBI), has been unable to carry out the consolidation due to opposition from Discount Bank.

First International Bank has a total market cap of NIS 6.48 billion, making it the 17th largest company traded on the TASE. However, the share is split between the FTIN5 share, which is traded on the Tel Aviv 75 Index, with a market cap of NIS 3.76 billion, and the FTIN1 share, with a market cap of NIS 2.62 billion.

First International Bank is the only one of the five banks on the Banking Index that is not also included on the Tel Aviv 25 Index. Consolidation of the two shares will make the bank eligible for inclusion on the Tel Aviv 25 Index, since its market cap is larger than the eight smallest companies on the index, including Strauss Group Ltd. (TASE:STRS), Osem Investments Ltd. (TASE: OSEM), Paz Oil Company Ltd. (TASE:PZOL), and Oil Refineries Ltd. (TASE:ORL), and the three newest entries on the index, Gazit-Globe Ltd. (TASE: GLOB), Delek Drilling LP (TASE: DEDR.L), and Avner Oil and Gas LP (TASE: AVNR.L). The bank's market cap is 72% higher than the market cap of Ormat Industries Ltd. (TASE: ORMT), the smallest company on the index.

However, inclusion of First International Bank on the Tel Aviv 25 Index cannot happen until Discount Bank reduces its stake in the bank to less than 20% in order to meet the TASE's liquidity threshold condition for companies on the index.

First International Bank has a capital adequacy ratio of 14.33%, the highest among Israel's five largest banks. At the same time as the shares consolidation, the bank intends to distribute a dividend of NIS 500-700 million, which requires approval of the Bank of Israel.

First International Bank's FTIN5 share rose 3.1% by midday to NIS 67.13.

Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2010

First Int'l Bank aims for TA 25 Index

Unity pays: the bank first has to consolidate its two share issues.