Bank Hapoalim is holding talks to buy 50% of a United States-based investment bank, says a source close to the bank's controlling shareholders.
Hapoalim is reportedly willing to pay $50 million for the 50% interest.
Another source told
that the talks have reached an advanced stage, but nothing has been finalized.
Buying the investment bank would fit in with Bank Hapoalim's strategy of expanding its activities abroad to increase its growth potential. It would also complement Hapoalim's other banking activities abroad, including the Signature Bank, a wholly owned subsidiary that opened six branches in the New York area in May.
In March 2001 Bank Hapoalim acquired the Signature Bank of New York jointly with a host of other entities ? Zohar Hashemesh Le-Hashkaot, Hapoalim U.S.A. Holding Company, Arison Holdings (all based on Tel Aviv) and Salt Industries, based in Atlit, Israel.
Hapoalim reportedly invested about $60 million in Signature, which commenced operations three months ago with the launch of six branches.
Signature is managed by Joe DePaolo, who previously led the retail customers and households department of the Republic National Bank of New York, now known as the HSBC Bank USA.
Several key employees decamped when HSBC bought Republic from the Safra banking family at the end of December 1999 for about $3 billion, including DePaolo and John Tamberlane, Signature's vice-chairman.
The New York business magazine Crain's wrote last week that the shift of top executives induced many Republic customers to shift custom. HSBC subsequently sued Signature and its top managers, Crain's added, to prevent them from recruiting customers of Republic origin.
A Signature spokesperson said that hearings had been held and an understanding was being reached in these very days. Spokesmen for HSBC and Hapoalim refused to comment.
The article included an interview with Scott Shay and Lewis Ranieri, partners in the Hyperion venture capital fund and members of the controlling group of Bank Hapoalim shareholders, with a 2.9% stake in the bank.
Shay is a member of the board of directors of the bank and also serves as chairman of Signature.
Shay told Crain's that Bank Hapoalim has invested $60 million in Signature and may open additional branches.
Hapoalim will do all it can to support Signature "including giving the bank the time and capital it needs to grow and become profitable", Shay said. Signature hopes to attract customers from New York's large Jewish population. By the end of three years, it hopes to have 2,500 customers and manage assets of $2 billion. The bank currently employs about 150 workers, he added.