UBS buys 5% of Bank Leumi shares

Swiss bank UBS has won a state tender to purchase 5% of Bank Leumi's shares. The bank purchased the stocks for NIS 1.3 billion ($370 million). UBS is the largest bank in Switzerland and one of the largest in the world.

Finance Minister Yuval Steinitz said in response: "Following the completion of the privatization of Bank Discount we have successfully sold 5% of state-owned Bank Leumi stocks. This is an achievement for the State of Israel and a vote of confidence in its economy and financial fortitude."

Until Wednesday, the State held 11.5% of the bank's shares and was effectively the controlling shareholder. It now remains with 6.5% in holdings. Businessman Shlomo Eliahu holds 10% of the stocks and is the biggest shareholder. It is unclear as of yet who will become the controlling shareholder as the Bank of Israel strongly objects granting Eliahu with the control permit.

The three largest banks in Israel, Leumi, Discount and Hapoalim, were nationalized in 1983. Bank Leumi was the last to be privatized. Nevertheless, the privatization bears no real significance in terms of the bank's relationship with its clients. The bank, which was founded in the 1920s, was first privatized after the establishment of the State of Israel.

The Economics Committee approved the selling of the rest of the state-owned Bank Leumi shares last year.

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