Bank Leumi (TASE:LUMI) last night raised NIS 2.75 billion in a share offering to Israeli and overseas institutions. The offering atteacted demand of about NIS 6 billion, so that the bank, which had originally planned to raise NIS 2 billion, in the end raised NIS 2.75 billion.
The biggest participant was businessman Aaron Frenkel, who bought shares for NIS 930 million, giving him 2.1% of the bank’s equity. Frenkel recently sold his 37.22% stake in income producing real estate company Bayside Land Corp. Ltd. (Gav Yam) (TASE:BYSD1) to Property and Building Corp. Ltd. (TASE:PTBL) for NIS 3.026 billion, giving him a huge profit of NIS 1.25 billion on the deal and returns of 100%.
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Overall Leumi issued 91,000.000 new shares representing 6% of the bank’s equity. The offering was closed at NIS 30.25 per share, close to the bank’s closing price of NIS 30.50 on the TASE yesterday evening after the share price fell 5% yesterday. The share price is currently 0.98% higher today.
The share issue is aimed at supporting rising demand for loans in the commercial, business and mortgage sectors. Leumi like all Israeli banks is required by the Bank of Israel to strengthen its capital adequacy ratio, if it wants to increase the amount of loans that it extends. This has been partly achieved by halting the payment of dividends on profits and buying securities and now by raising capital through share offerings. At the end of the first quarter of 2022, Leumi’s capital adequacy ratio was 10.8%, only slightly above the Bank of Israel’s requirement of 10.2%.
Published by Globes, Israel business news – en.globes.co.il – on June 23, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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