(TASE:DSCT) stock is rising strong on rumors that it is negotiating to sell its New York operations to Bank Hapoalim (TASE:POLI).
, which is fully owned by Israel Discount Bank, is the bank's chief source of profit. Bank Hapoalim's objective in the rumored sale is to expand its activities outside Israel.
Israel Discount Bank's minimum capital ratio is 9.1%, at the edge of the Bank of Israel requirement 9%. The narrowness of the gap weighs on the bank's everyday operations, especially in the limitations it sets on extending credit to customers.
Israel Discount Bank is responsible for 14% of the general public's total credit, which amounts to NIS 540 billion.
The bank has been scrabbling for ways to improve its minimum capital ratio. It recently decided to focus more effort on households and medium-sized companies, and to examine major credit deals even more carefully than usual.
Discount New York, run by Arie Sheer, ended 2001 with a net profit of $62.5 million, more than First International Bank of Israel or Bank Mizrahi could claim for that year. Over the last five years Discount New York has netted $230 million, which helped reduce the parent bank's losses over the last two years to NIS 1.23 billion.
A top source in the banking establishment said that Hapoalim might not buy the entire equity of Discount New York, but would surely not settle for less than the controlling 50%.