First International Bank of Israel (TASE: FTIN) has closed the sale of its FIBI Bank (UK) unit more than a year after signing the agreement. Tungsten Corporation plc (LSE: TUNG), an electronic financial services provider, is acquiring the unit for £30 million (NIS 175 million). It has obtained approval from the Prudential Regulation Authority.
Tungsten will pay a multiple of 1.5 on FIBI Bank UK's equity. First International Bank will report a £6 million (NIS 35 million) profit on the sale. "As we stated in the financial report, the agreement for the sale of FIBI Bank (UK) was signed in March 2013, and the deadline for closing the deal was no later than August 8, 2014," said First International Bank, which is controlled by Zadik Bino.
FIBI Bank (UK) will be renamed Tungsten Bank.
Tungsten Corporation is seeking to expand its services from beyond invoices, and acquired FIBI Bank (UK) for this purpose. First International Bank decided to sell its London activity because of tightening foreign regulations and the activity's low profitability. FIBI Bank (UK) lost £371,000 in the first quarter of 2014 compared with a loss of £154,000 in the corresponding quarter.
Other Israeli banks are also closing foreign operations. Bank Leumi (TASE: LUMI) is closing foreign representative offices, Bank Hapoalim (TASE: POLI) has closed its London branch, and Israel Discount Bank (TASE: DSCT) is reducing operations in Switzerland.
Published by Globes [online], Israel business news - www.globes-online.com - on June 10, 2014
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