Bank Hapoalim has offered no response.
Hapoalim acquired BankPozitif at the end of 2006 for $100 million, and since then has increased its stake in the bank by another $76 million. The acquisition is the largest business activity a leading Israeli public company has in the Republic of Turkey.
Yet since 2008, Bank Hapoalim has incurred NIS 272 million (about $75 million) in losses stemming from its Pozitif holdings.
The reduction of the bank's goodwill value in the company's reports and the devaluation of the Turkish lira against the Israeli shekel have left Bank Hapoalim with a capital loss in its Pozitif holdings, which dropped from NIS 873 million ($242 million) at the end of 2008 to NIS 636 million ($176 million) in late June 2011.
Limited opportunities for growth
Pozitif deals in banking services to retail and business sectors. The fact that the bank has no permit to manage deposits from the Turkish regulator stems its growth and it any growth it did realize was based solely on its equity capital.
For that end, Bank Hapoalim was forced to pour funding into the bank directly and indirectly by acquiring the bank's bonds.
Hapoalim Chairman Yair Seroussi has been trying, ever since stepping into office in 2009, to persuade the Turkish regulator to permit the bank to manage deposits.
In 2010, Hapoalim submitted a $42 million bid for the Adabank acquisition tender believing that a merger of Pozitif with Adabank, which has the desired permit, would solve the problem but its bid was rejected by the Turkish regulator.
The deterioration in the two countries' diplomatic relationship is impeding the permit even more, with an extreme scenario in which the Turkish government nationalizes Bank Hapoalim's holdings in Pozitif is looming in the background.
Even so, the write-off is lower than Bank Hapoalim's net quarterly profit.
Click here to read this report in Hebrew
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