Clal Finance Batucha analyst Yuval Ben Zeev says he is "very worried" by the turmoil over the change in management at Bank Hapoalim (TASE: POLI; LSE:80OA). He adds, "The situation is very complicated and very worrying. The situation resembles a war in which the division commander, corps commander, and chief of staff quit in the middle of battle."
Bank Hapoalim today notified the Tel Aviv Stock Exchange (TASE) that its board will tomorrow convene to discuss Supervisor of Banks Rony Hizkiyahu's decision to examine whether the bank's board properly discussed the reasons for the resignation of the CEO, as well as the decision-making process for his replacement. Hizkiyahu instructed the bank's board not to go ahead with the appointment of a new CEO until after his review of the issue.
Bank Hapoalim, under chairman Dan Dankner, announced the appointment of deputy CEO Zion Keinan to replace Zvi Ziv as CEO the same day as he resigned last week.
Ben-Zeev rejects the argument that the changeover is merely a procedural matter at the bank. "On the face of it, it could be said that this is a storm in a teacup," but in fact there is an accumulation of worrying developments.
The troubling issues include Hizkiyahu's intervention in Bank Hapoalim's decision-making processes, including his order that the bank allocate capital against mortgage-backed securities (MBS), which Ben-Zeev believes amounted to an order to sell the MBS portfolio, and his forbidding the bank to acquire banks in Russia. Ben-Zeev is critical of the decision-making processes and the conduct of the bank's board of directors. He asks whether Hizkiyahu's intervention in the Keinan appointment is an "expression of his criticism of Keinan".
Published by Globes [online], Israel business news - www.globes-online.com - on March 30, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009