Leumi to add $65m to its capital

Bank Leumi’s share capital will be raised by $65m (49m euros) to $100m (75m euros), in the wake of the bank’s expansion on the domestic market, reads Globes Israeli publication.
The bank is controlled by Bank Leumi Israel, which owns 99.71% in it. The contribution to capital exceeds the previously announced sum, of around 30m euros ($40m).
The Israelis had initially planned to invest 15m euros in the domestic subsidiary in July, and then increase its capital again by the same amount in mid 2008.
Leumi during this week received the Bank of Israel’s approval to operate the capital injection.
By taking this decision, Israel’s second biggest lending institution is speeding up the implementation of its business plan for the Romanian subsidiary, reads Globes. The Israelis arrived on the Romanian market last summer, when they took over from Kolal BV, a company in Netherlands, Eurombank, the current Bank Leumi, for approximately 26 million euros (34 million dollars).
The bank in 2006 generated losses standing at 5.32 million euros (6.7 million dollars), 3.6% more than in the previous year. Bank Leumi’s assets surged last year by 52 percent, to 177.5 million euros (222.8 million dollars).
The lending institution last year drew in deposits worth around 130 million euros (175.5 million dollars) and released loans worth around 78 million euros (105 million dollars).
At the end of last year, Bank Leumi held a territorial network of 35 branches.
The group did not publish the domestic subsidiary’s figures for the first quarter of this year separately. Last summer, when they took over the bank, the Israelis explained the first year would be dedicated to reorganisation, a process to be followed by sustained development.
For the current year, the bank plans to enter the market of private pensions, introduce private banking services and provide several types of insurance. On the private banking segment, the bank plans to provide derivatives to customers with above-the-average incomes.
In Israel, Bank Leumi is the second biggest lending institution on the market. In the first quarter of this year, Bank Leumi reported net income standing at 168 million euros (226.4 million dollars), 17.5% lower compared with the corresponding period of last year.