Best bank – Bank Hapoalim
Best local partner – Leader Holdings & Investment
Best debt house – Citigroup
Best equity house – UBS
Best M&A house – Citigroup
Israel’s banks continue to suffer from the country’s poor economic climate and the continuing Palestinian intifada. Bank Hapoalim, once again the winner of the best bank in Israel award, continues to tackle industry-wide bad-loan problems by provisioning and cutting costs more aggressively than its competitors. Bank Leumi, its arch-rival, has been more reluctant to bite the bullet, leaving Hapoalim with a bit more room for flexibility.
Hapoalim and Leumi together control between 60% and 70% of the market and are otherwise quite similar. Hapoalim’s aggressive provisioning, described as “everything including the kitchen sink” by analysts, did not do much good for its former CEO, Eli Yones, however. He was ousted in April by shareholders who disagreed with the strategy.
Leader Holdings & Investment is one of the most active and highly regarded investment banks in Israel and the choice for best local partner. Part of Shrem, Fudim, Kelner & Co, Leader’s brokerage and investment banking units led many of Israel’s biggest IPOs and privatizations, including those of Bank Hapoalim, Bank Leumi, Discount Bank of Israel and Bezeq.
Citigroup, which managed the two biggest loan deals of the year and is mandated for a forthcoming sovereign bond issue along with Lehman, is the best debt house this year. Last year’s winner Lehman found fewer opportunities as fewer names sought to access the bond markets.
Citigroup also takes the award for best M&A house for its work on the biggest Israeli M&A deal of the year, advising telecommunications software maker Nice Systems on its $80 million acquisition of Thales Contact Solutions in July 2002. Thales was advised by Rothschild.
UBS remains the best equity house. It is the only foreign broker with a seat on the Tel Aviv Stock Exchange (Tase) and has the top-ranked research team for Israeli equities. UBS is also a leading market maker for stocks on the Tase and for Israeli stocks listed on Nasdaq. UBS has led a number of large block trades and also led the $80 million IPO for Verint in May 2002 , which was also the only IPO on the Tase in that year.
