Leumi CEO: More cuts on the way

R.Aminoach, M.Rubino Photos T.Matsafi J. Bloom

Bank Leumi CEO Rakefet Russak-Aminoach told "Bloomberg" at the 2017 World Economic Forum in Davos that the Israeli bank must continue streamlining.

Bank Leumi (TASE: LUMI) will continue its elimination of jobs, while planning to renew its distribution of a dividend soon, Bank Leumi CEO Rakefet Russak-Aminoach told the Bloomberg news agency at the 2017 World Economic Forum in Davos.

"Banks are becoming smaller," Russak-Aminoach said. "In contrast to the situation a decade ago, the banking model is changing every day. If we don't change, we will die."

Russak-Aminoach's strategy in recent years has been to streamline and cut expenses, while the low interest rate set by the Bank of Israel is having a negative impact on the banks' revenue line. In addition, the banks are being forced to meet rigorous capital adequacy requirements, and have therefore had to implement various streamlining plans. Like other Israeli banks, Bank Leumi has closed many branches, cut its work force, and shifted to a focus on digital banking.

Bank Leumi has eliminated 2,100 jobs, 15% of its personnel, over the past four years. In June, the bank announced that it would consider another personnel cut. Russak-Aminoach said today that the final number of jobs to be cut was a "flexible target."

Bank Leumi Workers Committee chair Miri Rubino reacted angrily to Russak-Aminoach's remarks. "I suugest that the CEO again reads through the agreements she herself signed and I want to make it clear to Bank leumi's management and employees that there have been no layoffs and there won't be any layoffs. Bank Leumi belongs to its employees and only those who want to voluntarily retire will leave the bank. I understand that its bice to be applauded in distant countries but here in Israel the reality is different. If the bank wants to fire workers in order to streamline, I suggest that they begin with the senior management."

Published by Globes [online], Israel Business News - www.globes-online.com - on January 18, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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R.Aminoach, M.Rubino Photos T.Matsafi J. Bloom
R.Aminoach, M.Rubino Photos T.Matsafi J. Bloom
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