Bank Hapoalim (TASE: POLI; LSE:80OA) chairman Dan Dankner and the board of directors will again discuss in a few weeks the acquisition of Russian bank SDM. The discussion will be part of the bank's formulation of the next stage of its international expansion strategy. The board will review the bank's current activities and foreign acquisitions, and it will decide on new directions for development and the amounts to be invested for implementing the strategy.
Some Bank Hapoalim officers are calling for the cancellation of the SDM acquisition because of the drastic change in the macroeconomic climate in recent months, including the worsening of the global financial crisis, and the worsening economic and geopolitical situation in Russia since its attack on Georgia last month. Sources close to the bank stress that all these topics will be addressed by the board, but that there is no intention of cancelling the SDM acquisition. The sources said that there is plenty of time to make a decision, and they believe that months or even a year will be needed to obtain approval of the deal from the Russian regulators.
Bank of Israel officials have also recently expressed their dissatisfaction from the quality of Bank Hapoalim's decision-making on the SDM acquisition. The sources added that an Israeli bank seeking to acquire a foreign bank must first ensure that its capital adequacy ratio meets the mandated target.
Bank Hapoalim acquired the controlling interest in SDM for $111 million in July, at a company value of $142.5 million. The deal makes Bank Hapoalim the first Israeli bank to buy a controlling stake in a Russian bank.
Published by Globes [online], Israel business news - www.globes-online.com - on September 24, 2008
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