The Ministry of Finance is considering selling the state's 6% holding in Bank Leumi (TASE: LUMI) in the near future. In recent months, several meetings have taken place between Minister of Finance Moshe Kahlon and Accountant General Rony Hizkiyahu in which they discussed selling the state's shares in the bank, either in a single sale or in tranches, and either through a sale to a single party with a permit from the Bank of Israel or through the Tel Aviv Stock Exchange.
Bank Leumi's share price, which has risen 30% over the past year, is currently trading at a multiple on 1 on equity, meaning that a sale will be taking place at a peak value. The current market value of the state's shares is NIS 5.83 billion, and a sale will swell the state coffers. The shares are the state's last remaining holding in the shares of banks in Israel following the 1980s share manipulation scandal, which culminated in the nationalization of the country's major banks. The Ministry of Finance wanted to sell the shares several years ago, and obtained Knesset approval for it, but the sale was eventually called off. In retrospect, the decision turned out to be correct, because Bank Leumi improved its performance and its share price rose sharply. The bank also resumed its distribution of dividends to its shareholders, including the state.
Now that Bank Leumi's share is benefiting from positive sentiment, the Ministry of Finance is again considering a sale.
The Ministry of Finance made no response to the report.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2018
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