This is what is up for grabs if Bank Leumi sells US unit

Potential suitors for Bank Leumi le-Israel BM's U.S. unit would acquire a franchise that generated $49 million in net income in 2020.

The largest Israeli bank by assets counts the U.S. as its biggest market outside of Israel. U.S. operations contributed 5.76% to the parent company's net income in the financial year 2020. It has five depositary branches in the U.S., including in New York, Chicago and Los Angeles, according to S&P Global Market Intelligence data.

Bank Leumi USA accounted for 5.83% of group total loans, amounting to 17.21 billion Israeli shekels. Total group net income fell 40.3% year over year in 2020 to 2.10 billion shekels, with U.S. net income dropping 46.9% over the same period.

Leumi is said to be considering a sale of its U.S. business, according to Bloomberg News. The bank sold 15% of its U.S. bank holding company, Bank Leumi Le-Israel Corp., to Endicott Management Co. and MSD Capital LP in 2018 for a transaction value of about $141 million. As a part of that deal, the bank regularly reviews options for its U.S. franchise.

Strategic options

The U.S. business could also stage an IPO; a plan was put on hold until market conditions improved. However, Leumi could also decide to keep Leumi USA, according to the report.

Leumi has begun shutting down its China office and closed its foreign private banking offices in 2020.

Several foreign lenders have either left the U.S. market or have considered an exit, including Banco Bilbao Vizcaya Argentaria SA and HSBC Holdings PLC. In late 2020 BBVA agreed to off-load its U.S. assets to The PNC Financial Services Group Inc., while HSBC aims to sell its American retail business.

As of May 14, US$1 was equivalent to 3.28 Israeli shekels.