Bank Hapoalim (TASE: POLI) today reported to the Tel Aviv Stock Exchange (TASE) that it has completed the sale of BankPozitif Kazakhstan for $26 million, the Israeli bank. Bank Hapoalim's CEO is Zion Kenan.
Bank Hapoalim will write off NIS 22 million in its books in the fourth quarter of 2015 on the sale. Thre numbers have changed since the bank reported on October 22 that the proceeds from the deal would be $32 million, making its loss NIS 28 million.
Bank Hapoalim acquired BankPozitif Kazakhstan from Eurasian Bank JSC, a Kazakh bank. The decision to sell the branch in Kazakhstan was part of Bank Hapoalim's strategy of focusing its overseas business in commercial banking in the US and international private banking.
"The regulatory environment in Kazakhstan has changed. The country's risk profile is high, and Bank Hapoalim's growth potential there is limited. The sale of the bank is contributing to the reduction of activity in this region," Bank Hapoalim said in late October.
Bank Hapoalim's Kazakhstan adventure began in 2007, when Turkish bank BankPozitif expanded to Kazakhstan by acquiring a bank there for $56 million. Bank Hapoalim controls BankPozitif with a 70% stake, and Turkish businessman Halit Cingillioglu is also a partner in BankPozitif. Bank Hapoalim acquired the Turkish bank almost a decade ago for $100 million.
Bank Hapoalim has seen mostly losses from its investment in Turkey. BankPozitif lost $12 million in 2014, compared with an $8 million profit in 2013. Among other things, the loss was caused by the devaluation of the Turkish lira and the Kazakh currency, higher expenses, and the fact that the bank had no income from the sale of assets in 2014. Excluding exchange rate differences and tax adjustments, Bank Hapoalim's loss from BankPozitif in 2014 totaled NIS 37 million. Other than the effect of the exchange rate, the bank itself suffered from the slowdown in the Turkish economy.
Bank Hapoalim is trying to find a buyer for BankPozitif, and reported last May that it had received an offer. As far as is known, Bank Hapoalim has been negotiating for some time with a Turkish holding holding company to sell its holdings in BankPozitif.
Published by Globes [online], Israel business news - www.globes-online.com - on December 31, 2015
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