Until today, the dominant personality at Bank Hapoalim (TASE: POLI) was Efrat Peled. Peled may be just one more director, but as CEO of Arison Investments and confidante of Shari Arison she was the strong person at the bank, and all important decisions went through her.
Today, because of Arison's decision to sell her shares in the bank via the stock exchange, Peled will have to resign from the board, together with Arison Investments' other representatives. This will mean that the strongest figures at the bank will now be chairman Oded Eran and CEO Arik Pinto.
The main consequence of a bank changing from one with a controlling core to one without a controlling core is that the management becomes stronger. Over the years this has been very clear at Bank Leumi (TASE: LUMI), where Galia Maor was very much in charge in the past, as Rakefet Russak-Aminoach is currently.
Israel Discount Bank (TASE: DSCT) too became a bank without a controlling core, and the dominant figure there is CEO Lilach Asher-Topilsky, who has revolutionized the bank in the past few years, with the backing of chairman Yossi Bachar.
The main beneficiary of the events at Bank Hapoalim is chairman Eran Oded, who was appointed to the post less than two years ago (which means that he will be able to stay in it for seven more years, as under Bank of Israel rules the chairman of a bank without a controlling core may serve for nine years). Eran was an Arison appointee, but he is parting from the group after a short time, and remaining with the prestigious position of chairman of Israel's biggest bank.
Pinto was appointed CEO two years ago, at a difficult time for the bank. The chief burden he has had to wrestle with is the complicated investigation in the US, which has exacted, and will continue to exact, a heavy price. At least he can now take comfort in the fact that pressure from the owners will be off his shoulders.
Despite the change in the balance of forces, no dramatic changes should be expected in the day to day running of Bank Hapoalim, as Pinto tried to explain today. The bank will presumably carry on as normal, but decision making on strategic matters such as the sale of Isracard will change.
Published by Globes [online], Israel business news - www.globes-online.com - on September 4, 2018
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