Bank Leumi is tendering to delist Leumi Mortgage Bank (TASE:LMBK) from the Tel Aviv Stock Exchange.

Leumi's move comes eight months after its arch-rival Bank Hapoalim completed a buyback of its mortgages subsidiary, Mishkan.

The buyback will be costing Leumi about NIS 125 million.

Leumi holds 89.8% of Leumi Mortgage Bank's share capital. It is offering NIS 1,295 for each LMBK share, a premium of 27% above its opening price Wednesday.

If Leumi achieves a 95% holding in its subsidiary, it can delist the company without requiring the permission of the remaining shareholders.

The final date to respond to Leumi's offer has been set at August 20, 2002, at 16:00 local time.

In parallel, Leumi Mortgage Bank today reported its results for the second quarter, indicating that business has not been good.

Its profit from financing, before provision for doubtful debt, was NIS 39 million, down 45% from the corresponding quarter of 2001.

Its net profit tumbled 75% from the parallel to NIS 8 million, compared with NIS 32 million in the second quarter of 2001.

Provision for doubtful debt sank 17% from the parallel quarter to NIS 10 million.

For the half-year, Leumi Mortgage Bank netted NIS 30 million, down about 39% from the corresponding quarter of 2001. Its profit from financing was NIS 89 million, 28% less than in the parallel. Provision for doubtful debt was NIS 26 million, the same as in the corresponding six months of 2001.