Discount chairman asked to step down

Israel Discount Bank Chairman Shlomo Zohar had been asked to step down by the bank's controlling shareholders, the Bronfman-Schron group.

Discount, Israel's third largest bank, said Sunday in a statement to the Tel Aviv Stock Exchange that Zohar had been asked to leave by the end of 2009 but gave no other details.

Zohar was scheduled to serve until February 2011. He was appointed in February 2006 after the group bought a controlling stake in the bank from the government.

The Bank of Israel's banking supervisor said it "knows of no incident in Discount bank that led to this request" that Zohar be asked to resign.

"The banking supervisor is looking into the sequence of events, the conduct of those involved and implementation of the proper rules of corporate governance," it said in a statement.

Earlier this year, the main shareholder in Hapoalim, Israel's second largest bank, was forced by the central bank to oust Hapoalim chairman Dan Dankner over a dispute that led to its CEO to resign.

The Bronfman-Schron group owns a controlling 26% share of Discount, which has struggled more than Israel's other large banks.

The state owns another 25% which it plans to sell soon in 5% stakes.

Discount's shares were down 2.4% in early afternoon trading in Tel Aviv, compared with declines of 2.1% on the broader bourse.