The Bank of Israel has approved U.S.-Israeli billionaire Shari Arison's request to reduce its stake in Bank Hapoalim BM to not more than 5% from approximately 20% at present.
Arison has been granted a period of up to five years to reduce her controlling stake in the bank, which can be extended by two years, the central bank said Sept. 4.
The regulator added that to avoid any concern of conflict of interest, the terms of three Arison Group-affiliated directors on Bank Hapoalim's board will end immediately. They are Arison Investments CEO Efrat Peled, Ido Stern and Meir Wietchner, Globes reported.
Meanwhile, Bank Hapoalim Chairman Oded Eran has been allowed to continue in his position during the ownership change, pursuant to the supervisor of banks' decision, as Eran, though appointed by the Arison family, is not connected to the billionaire as he is not an officeholder in the group, according to the central bank.
Once transitioned to a holding company, Bank Hapoalim will become a publicly held bank like Israeli peers Bank Leumi le-Israel BM, Israel Discount Bank Ltd. and Dexia Israel Bank Ltd. The holding permit trigger will also limit Arison's voting rights at the bank's general meeting to 5%.
Post-transition, the committee to appoint directors, headed by retired judge Moshe Gal, will recommend nominees to serve as directors to the general meeting of Bank Hapoalim's shareholders, the central bank said, adding that it did not prescribe a specific model of ownership but ensures that every bank's model is aligned to the regulatory perspective.
Arison decided to sell her shares in Bank Hapaolim after failing to find a strategic partner to reduce her 20% controlling stake in the lender, Reuters reported.
Around 75% of Bank Hapaolim's shares are traded on the Tel Aviv Stock Exchange while 5% remain with institutional investors, Reuters reported. A share sale will not affect its operations, the lender said.
"As far as the day to day management of the bank is concerned, there is no change in the way it is run. We shall continue functioning as usual, with the current management team," Bank Hapoalim CEO Ari Pinto reportedly said in a letter to staff.
Bank Hapoalim is Israel's largest bank by assets.