Bank Leumi (TASE: LUMI) is considering expanding its activity in Switzerland. Bank Leumi Switzerland Ltd. intends to acquire an assets management company with CHF 2-3 billion (NIS 7.5-11.5 billion) in assets under management and merge it into the bank. An acquisition of this size would boost Bank Leumi Switzerland's activity by 30-50%.
Bank Leumi president and CEO Galia Maor serves as chairwoman of Bank Leumi Switzerland, and its CEO is Amnon Saidenberg. Bank Leumi Switzerland will coordinate an acquisition with Bank Leumi, which must also approve it.
Saidenberg told "Globes", "I don’t rule out the possibility of future growth through an acquisition. It is possible to acquire either a small bank or an investment firm that manages client's assets. The size we're seeking is a company with CHF 2-3 billion in assets under management. We're now in a rolling process to seek a bank. The timing of an acquisition will depend on the opportunities we see in the field."
Bank Leumi Switzerland currently has CHF 5.8 billion in assets under management at its two branches in Zurich and Geneva. The bank also has representative offices in Israel and Hungary. The bank's revenue is 1-1.2% of its assets.
Bank Leumi Switzerland posted a profit of CHF 3.6 million in 2008 and CHF 6 million in the first half of 2009.
"By increasing our assets under management, we can boost revenue without increasing expenses proportionally," says Saidenberg. "The platform is already in place, as are the computer systems and personnel that can support a doubling of the bank's size. Acquiring a company of the size that we're interested in will give us the ability to reach better efficiency ratios and to exploit economies of scale, which is very hard to achieve at our present level of assets. After the acquisition, our revenue-to-assets ratio will stay the same, but we won't have to increase our expenses by the same amount, so our operating and net profit will grow."
Bank Leumi Switzerland was founded in 1953. It is ranked 55th among Switzerland's 150 foreign banks. It specializes in private banking and portfolio management.
Published by Globes [online], Israel business news - www.globes-online.com - on August 19, 2009
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