Bank Hapoalim (LSE: 80OA; TASE: POLI) president and CEO Zvi Ziv sees the economic crisis continuing into 2010. Ziv told Bank Hapoalim's in-house magazine 'Diyukan,' "No real recovery is expected in 2009. In the best case scenario, we will begin to see the first buds of an improvement only during 2010, and perhaps even later."
Ziv expects that there will be a credit crisis in the Israeli economy during the coming year. "The answer to whether the banking system can cope with the demand for credit in 2009 is no. Even if we wanted to, we couldn't supply all the demand for credit. We would be required to examine carefully the risks that we are taking upon ourselves in customer credit portfolios, in Israel and abroad, and use cautious judgment, and go back over and recheck every credit decision. In fact this is a vital condition for getting through the crisis in the best possible way."
Ziv also said that Bank Hapoalim's revenue has been hit hard by the sale of its assets (E.P. - provident funds, mutual funds and Bank Massad, Bank Yahav for Government Employees and Bank Otsar Hahayal), in recent years and the scrapping of fees, which will affect "the bottom line" and therefore, the way to increase the bank's future profitability is to renew the level of expenditures and adapt them to the level of income. He said, "2009 will be a very difficult year from the point of view of the bank's income. Therefore, there is a need to become more efficient and cut costs."
In contrast, Bank Hapoalim chairman Dan Dankner thinks that the crisis is an opportunity. He said, "The global crisis generates new business opportunities. A new financial order is being created and it is still too early to assess what its characteristics will be."
Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2009
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