After the Bank of Israel gave its approval for the move, Mizrahi Tefahot Bank (TASE:MZTF) has sold part of its mortgage portfolio to a unit of Menorah Mivtachim Holdings Ltd. (TASE: MORA). This is the first transaction of its kind in Israel.
Mizrahi Tefahot is selling NIS 700 million of its NIS 100 billion portfolio.
The portion of the portfolio being sold consists of loans made by the bank in 2013 on which repayments have been made promptly and continuously, with no arrears. Under the sale agreement, 80% of the rights and commitments in the portfolio have been sold to the buyers, while 20% remain with the bank, which will continue to manage the portfolio.
Mizrahi Tefahot CEO Eldad Fresher said, "The sale of part of the mortgage portfolio, as well as the issue of coco (contingent convertible) bonds are two novel moves for the Israeli market. The transactions that Mizrahi Tefahot has recently completed will enable it to deal optimally with the challenges it will face in 2016, chiefly continued growth and expansion of the bank's business while meeting capital adequacy and regulatory goals.
"Mizrahi Tefahot sees the financial institutions as partners and will continue to promote such collaborations that generate real value both for the bank and for institutions that seek profitable and attractive investment instruments that, no less importantly, are secure and low-risk."
Published by Globes [online], Israel business news - www.globes-online.com - on December 31, 2015
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