Unbalanced: Banks offer minor benefits, with major catches, for war-harmed clients
Told to give back a fraction of their vast profits, Hapoalim offers $68 to students and reservists… if they have a deposit account or $8,000 balance, Leumi will defer payments on mortages below $27,000
Sharon Wrobel is a tech reporter for The Times of Israel
Israel’s main commercial banks are introducing a series of temporary benefits, fee waivers and improved interest rate terms that hinge on various conditions after the country’s regulator asked the highly profitable lenders to ease the financial burden for war-battered retail customers.
The move comes about a month after the Bank of Israel urged the country’s lenders, which have been raking in hefty profits, to put aside NIS 1.5 billion ($408 million) in 2025 and in 2026 to pay for a financial relief program that includes leniencies in credit and fees for war-affected households and small and medium-sized businesses, including reservists, evacuees from conflict zones and families of war casualties.
“NIS 3 billion over two years is a drop in the ocean for Israeli banks that have raked in some NIS 30 billion in profits,” Gali Ingber, head of finance studies at the College of Management Academic Studies, told The Times of Israel. “The relief outlines of the banks differ not only from one another, but they are also complicated and difficult to grasp as they depend on certain terms and conditions which will make them hard for the regulator to supervise to ensure that they are fully implemented.”
Ingber lamented that it is “not clear if the actual relief will go to those households and businesses that are financially most affected by the repercussions of the war or are in most need due to the fighting, as the outlines apply across broad sections of the population.”
Bank of Israel Governor Amir Yaron contended that the financial relief outline, as stipulated by the central bank to the country’s commercial banks, will offer an immediate response to households and small and medium-sized businesses.
“The outline will provide significant financial relief to the public, and a large portion of the banking system’s customers are expected to feel the leniencies in their pockets,” said Yaron.
Bank Hapoalim, the country’s second-largest lender, will give NIS 250 ($68) to young adults up to the age of 30, students and reservists, if they have a deposit account or current account balance of at least NIS 30,000 ($8,120). In addition, they will be exempted from certain fees on foreign and Israeli securities as well as from paying basic current account fees during the April to June quarter.
Residents of the communities in the north and south who were evacuated from their homes and residents of the south, including those living within 7 kilometers (4.3 miles) of the Gaza border, will be exempt from basic current account and credit card fees during the second quarter of 2025.
Bank Hapoalim will provide a one-off grant of NIS 500 ($135) to self-employed customers, but only to those who have taken out a loan of more than NIS 100,000 ($27,000) in the first three months of the year. Mortgage holders who took out a loan exceeding NIS 500,000 ($135,000) in the first quarter of the year will be entitled to a one-off grant of NIS 1,000 ($270).
“It is ridiculous and appears almost like a bluff that they are offering one-time grants when many households can’t make ends meet and many businesses are forced to close down due to serving in the war, taking care of their loved ones and other economic hardships,” said Ingber.
Similarly, Israel’s largest lender Bank Leumi presented a relief package for reservists, evacuees from the south and north of the country, and war victims. As part of the package, the bank will defer payments on loans with an outstanding value of up to NIS 100,000 (some $27,000) for private and business customers for a period of three months and freeze mortgage payments for up to 24 months. In addition, the selected war-affected groups will be exempt from paying basic current account and credit fees and will not be charged interest on overdraft balances.
Leumi customers with a balance of up to NIS 10,000 in their current account will receive 2% interest on the funds. All of the bank’s private customers will be offered to defer three payments on an existing loan with an outstanding balance of an aggregate amount of up to NIS 100,000.
Both Hapoalim and Leumi said that the relief package will apply automatically to eligible customers during the April to June quarter and will be reassessed every quarter.
Israel Discount Bank, the country’s fourth-largest lender, announced that its package is for reservists and small business owners and will translate into financial relief of up to NIS 375 per month, and more than NIS 1,000 per quarter. As part of the outline effective April 1, Discount Bank said reserve soldiers and small business owners will benefit from a waiver of up to 100% on overdraft interest, interest on loans and exemption from paying current account fees.
The country’s banks have come under fire from policymakers and the public for profiting from the fruits of high interest rates on loans and mortgages while not offering the public fair interest-bearing deposits and savings. That’s as households and businesses across Israel struggle to make credit and interest repayments during the 17-month war period.
Israel’s top lenders, including Bank Hapoalim and Bank Leumi, have posted record net profits over the past two years, while repayment costs for mortgage holders have ballooned, adding to the country’s already high cost of living.
The central bank said that each of the country’s banks will be obliged to publish the extent of the actual relief provided in its financial reports according to a reporting format issued by the Banking Supervision Department. The reports will be audited by the Banking Supervision Department.
“I expect the banks to promote additional relief for customers, even beyond what is stipulated in our outline,” said Israel’s Supervisor of Banks, Daniel Hahiashvili. “This step is alongside other infrastructure steps we are taking to increase fairness, competition and innovation, which will ultimately strengthen the customer’s bargaining power and public trust.”
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