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Israeli banking supervisor supports Mizrahi Tefahot-Union Bank merger

Israel's banking supervisor, Hedva Ber, is open to Mizrahi Tefahot Bank Ltd.'s acquisition of Union Bank of Israel Ltd., which she said would promote greater competition in Israel's banking sector.

Mizrahi Tefahot Bank is reportedly in talks to acquire a controlling stake in Union Bank of Israel.

Ber told Bloomberg News in an interview that the merger would open up competition in Israel's banking sector, of which Bank Leumi le-Israel BM and Bank Hapoalim B.M. have a combined 51% share, compared to Mizrahi Tefahot Bank's 8.1%, the newswire noted. Mizrahi can challenge the bigger players in the mortgage sector, Ber said, "and that's what we want to see in the whole industry."

"Ultimately it's about the consumer benefiting from competition," Ber said, adding that the process of making the market more competitive involved the sale of Bank Leumi and Bank Hapaolim's credit card units, to be evolved into independent banks, as well as "strengthening the medium-sized banks ... and furthering the technological revolution in banking."

Mizrahi Tefahot Bank's acquisition of Union Bank of Israel would require approval from Israel's Antitrust Authority, the newswire added, citing Ber.

Workers of Union Bank of Israel, meanwhile, said in a statement that Ber was "abandoning" the bank's 1,200 staffers with her support of the acquisition, Bloomberg added.