First Int'l mortgage workers to strike

Workers committee chairman: Customers should hurry to complete procedures.

The labor dispute at First International Bank of Israel (TASE: FTIN) has escalated: the bank's workers committee, headed by Hanoch Livneh, intends to call a strike in the bank's mortgages department next week.

"We know that homebuyers are locked in a timetable, which is why we are calling them to hurry to complete procedures as soon as possible, because lengthy sanctions are expected soon, which will make it difficult to obtain service. Even if service is provided, it will only be partial," Livneh told "Globes" today.

Four months ago, a labor dispute was declared between First International Bank's workers committee and management, headed by CEO Smadar Barber-Zadik. The main issues are the workload and a demand to increase staff at bank branches. Fairly mild measures have been taken since then, including strikes for a few hours at specific branches. In addition, all of the bank's employees held a one-day strike. But it now seems that Livneh intends to shut down an entire division - and for a long time.

Israel's mortgage market is booming, with borrowers taking NIS 4-5 billion a month in new mortgages. First International Bank grants NIS 4 billion in mortgages a year. The bank's portfolio totals NIS 16 billion, and it has a 7% share of the market.

Livneh decision to strike the mortgage division is not arbitrary. A lengthy disruption of this business could harm the bank. This is because, unlike in other activities, in which the customer is trapped at the bank, there is real competition in mortgages.

If regular banking activity is shut down, a customer can complain, but rarely switches to another bank. In contrast, a customer who cannot get a mortgage at First International Bank can simply go to another bank that makes a better offer.

First International Bank has two committees: a workers committee and a managers committee. Even if the bank's workers go on strike, managers, who account for a third of its workforce, will go to work, so officially, the mortgage division will not be closed. However, managers will not do the workers' jobs, so a strike at the mortgage division by the workers committee will cause serious disruptions.

Published by Globes [online], Israel business news - www.globes-online.com - on August 19, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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