Best bank: Bank Leumi
For Israel’s banks, 2023 was a story of two distinct parts: the months prior to the Hamas attacks on October 7; and those after.
Bank Leumi has impressed for its performance and initiatives in the first three quarters of the year, and its crisis management since the onset of the fighting.
In January 2023, the bank issued its inaugural $500 million green bond. The issuance was made under the International Capital Market Association’s Green Bond Principles, with a second party opinion provided by S&P Global Ratings.
The proceeds will be used to finance eco-friendly projects such as renewable energy, green construction, green transport, waste recycling and sustainable development.
In February 2023, the bank partnered with the European Investment Bank to provide €500 million to support green investment by Israeli small and medium-sized enterprises. The funds are provided by the EIB and channelled through Bank Leumi. They will be used to provide credit on preferential terms to SMEs across Israel, including supporting new investment in green and environmental projects.
The agreement with the EIB is part of Leumi’s long-term strategy to strengthen support for climate and environmental issues. The bank has set a target of NIS35 billion ($9.5 billion) for green credits by 2030.
Under CEO Hanan Fridman, the Tel Aviv-headquartered lender saw net income fall to NIS7 billion in 2023, compared to NIS7.7 billion in 2022. The boost from higher interest income was offset by a five-fold increase in loan default provision, mostly set aside in the second half of the year. The bank maintained one of the lowest NPL ratios in the market, ending 2023 with an NPL ratio of 0.85%.
Bank Leumi is in a strong position to handle the immediate fallout from the crisis and longer-term concerns over asset quality.
Best investment bank: Goldman Sachs
Goldman Sachs, which at the beginning of 2022 committed to doubling its workforce in Tel Aviv, topped Israel’s equity capital markets league tables last year with three deals worth a total of $251.17 million, giving the US-headquartered bank an 8.75% market share.
The bank acted as lead underwriter on the largest deal of the year for beauty and wellness company Oddity, which came to market with a $464 million IPO on the Nasdaq in July.
The firm also worked with other Israeli companies seeking to list in New York, including the geothermal company Ormat Technologies, which IPOed in March 2023.
Goldman acted as joint bookrunner, alongside Morgan Stanley, on one of the largest equity deals in Israel in the review period, the sale of Intel’s $1.5 billion stake in Israeli self-driving technology company, Mobileye.
In debt, the bank topped the league tables with seven deals, with a volume of $3.74 billion, giving it a 33.9% market share in Israel.
This included acting on the Israeli sovereign’s innovative June offering, which marked the world’s first digital government bond. The deal was part of a proof-of-concept trial for the issuance of distributed-ledger technology-based government bonds as a security token. Goldman acted as one of the 12 primary dealers, helping develop the market and cement Israel’s status as a tech hub.
Alongside the public deals, the investment bank also acted on a number of privately placed bonds for the Israeli government as part of its war financing.
Israel raised $4.5 billion-equivalent across nine privately placed bonds in 2023 after the October 7 attacks. Goldman was sole lead arranger on five of these nine issues, in dollars, euros and yen.
