Bank Hapoalim boss complains of ‘incitement’ when queried over its steep fees
In TV interview, Arik Pinto denies that his bank’s $745 million profit for 2017 came from high fees paid by customers, dodges questions about bank’s massive unpaid loans to tycoons
The head of Israel’s largest bank complained that the bank was facing “incitement” against it when he was queried in a TV interview Monday about the steep fees it charges ordinary customers. He also bridled at criticism that the bank had forgiven massive unpaid loans it made to Israeli tycoons, declaring that Hapoalim had now changed its lending policies.
Bank Hapoalim Chief Executive Arik Pinto made the comments during a heated exchange with the Hadashot TV news outlet following the publication of the bank’s financial report for 2017, which showed a NIS 2.6 billion ($745 million) profit last year.
Israeli banks have come under criticism for high fees charged to customers, which include percentages paid on both deposits and withdrawals.
The five-minute interview quickly grew tense as the station’s economic editor Keren Marciano quizzed Pinto on oft-heard complaints leveled at the bank by customers and analysts.
Pinto rejected the suggestion that the bank makes immense profits from customers who pay its steep fees, saying a measurement of return on equity should be used instead. (Return on equity, which measures a corporation’s profitability and is used as a measure to determine the profitability of banks, reached 7.5% for Hapoalim in 2017, compared with 7.7% in 2016.)
“I think that when it comes to return on equity, the profitability of the Israeli banking sector is about average in the OECD. We’re not extra-profitable,” Pinto said.
He then claimed that the banking sector was facing “incitement” over the fees it charges to customers.
“Incitement? There’s incitement against you?” Marciano asked.
“Of course.”
“Who incites?”
Pinto replied, “You see everything that’s happening. And I think that the banking sector is doing excellent work. It’s proved its resilience. A tremendous responsibility rests on our shoulders. Capital is invested. And I think that given all that, the banking sector adds value to customers, makes an immense contribution to the development of the economy.”
Asked about Hapoalim’s record in forgiving hundreds of millions of shekels in unpaid loans from tycoons including Nochi Dankner, Eliezer Fishman, Motti Zisser, Lev Leviev, and Shaul Elovitch, Pinto said the bank had changed its lending policies.
“You were the bank of the tycoons. You gave them credit almost without limit,” Marciano charged.
“Keren, when you look back you see with 20/20 vision. I don’t look back, I only look forward. We’ve learned most of the lessons. Our credit policy has changed, our appetite for risk has changed. Regulation has changed. I think that the chance of incidents like these happening again is low, very low. I think these problems are mostly in the past.”
The discussion devolved into a heated back and forth between Pinto and Marciano over poor loans made to the businessmen, some of whom were once among the country’s richest.
Referring to a United States Justice Department probe into three Israeli banks, Bank Hapoalim among them, on suspicion they helped Americans evade taxes, Pinto said he hoped it would be behind him by the end of 2019 and that Hapoalim would weather the storm.
He refused to comment on the bank’s handling of an allegation of sexual assault against its former CEO Zion Kenan.
The incident involved Kenan’s alleged sexual assault of a former employee of the bank during a trip to Kazakhstan nearly a decade ago, after which she was apparently paid millions of shekels. The incident was not reported to the Bank of Israel’s supervisor of banks, or to the bank’s directorate.
The Times of Israel Community.