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Rothschild Boulevard in central Tel Aviv is the heart of Israel's financial district. It hasn't changed much in recent years, but anybody looking up will see a new sight. Atop one of the new high-rises is a big, welcoming sign, with four English letters: HSBC.

Those four letters are the initials of one of the world's largest banks,

Hongkong Shanghai Bank Corp.



Two years ago HSBC acquired the late Edmond Safra's

Republic Bank of New York

. Although its sign now towers over the leafy canopy of the boulevard, HSBC won't start commercial activities for a couple of months, when the foreign currency dealing room of the British-Chinese bank opens for business and it begins commercial banking, initially for businesses and wealthy private clients.

HSBC was preceded in Israel by




, which began offering credit and other banking services to businesses six months ago.

Another multinational active in Israel is

Deutsche Bank

, which is running activities it bought with

Banker's Trust

a couple of years ago. In recent weeks Deutsche Bank has been actively trading bonds of

Teva Pharmaceuticals



Comverse Technology


, which each raised half a billion dollars in November.

The arrival of some of the world's biggest banks raised hopes in Israel that that they would break the banking duopoly of

Bank Hapoalim


Bank Leumi

. But the bankers operating the Israel branches of the multinationals are the same old names, usually refugees from the two local giants.

Citibank's business room is managed by Tal Vardi, who used to manage the dealing room at Hapoalim.

The new HSBC bureau is managed by Yeudah Levi, formerly head of the foreign currency division at Bank Leumi. HSBC's domestic chief dealer is Yuval Hasson, former Bank Hapoalim dealing room chief and recently a currency and bonds trader in the Moscow bureau of the former Republic Bank.

And who is managing forex trade for Deutsche? A couple of Israelis, one from the dealing room of

Israel Discount Bank

and one from Bank Hapoalim, which in recent years has become the country's biggest source of dealers.

The logic is clear. Importing bankers from overseas would cost a fortune, and they would know nothing of Israeli business culture, let alone the personalities involved. So the foreign banks seduced the locals with paychecks bigger by several orders of magnitude than domestic bans were paying and promised hitherto unheard-of bonuses.

But it is just that that leaves a bitter aftertaste of missed opportunities. After 50 years, real foreign banks have finally opened up in Israel. But the people manning them are the same people who previously led Bank Leumi, Bank Hapoalim,

Mizrahi Bank

and the rest of the local gang.

Israel didn't get new working methods, a new business culture, fresh daring or, most important, the willingness to take risks to capture market share. Israel got the same people, paid more.

No wonder that bankers in the Israeli banks' dealing rooms, the ones not chosen, seethe at their colleagues' checks -- but they do not feel threatened by the dealing rooms of Citibank and HSBC. "These are the same guys we bought from and sold to all these years. We know them and their methods," as one trader told us.

Not all is lost, though. HSBC, Citibank and, in the future, other foreign banks, too, will eventually change Israeli banking. Though almost all the bankers in the foreign banks' branches are Israeli, they will gradually learn new working methods, report to new managers and act more aggressively to be paid in innovative ways. The people who stand to gain from all this are their customers. The losers will be local banks that still think they're living in the past, when the duopoly ruled.

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