Trading on the Tel Aviv Stock Exchange ended Thursday with sharp declines, closing a volatile week in negative territory. The TA-35 index fell 3.1%, the TA-90 dropped about 2.7% and the TA-125 slid 2.8%.
Two main factors drove the losses. The first was a downward correction in insurance stocks following a strong rally earlier this week and sustained gains throughout 2025. The TA Insurance index fell 6.8%. Migdal Insurance plunged 7.2%, Clal fell 6%, Phoenix dropped 6.2% and Harel declined 7.5%.
The second factor was a warning by Finance Minister Bezalel Smotrich that he would double a planned tax on banks’ excess profits if they cancel customer benefit packages introduced during the war. The TA Banks index fell 4.2%. Mizrahi Tefahot dropped 4.8%, Hapoalim fell 4%, Discount slid about 5.5%, Leumi lost 3.7% and the International Bank of Israel declined 4.8%.
Smotrich delivered the warning earlier Thursday during a signing ceremony for a memorandum of understanding on extending the Red Line light rail to Rishon LeZion. “If you cancel the benefit package, we will double the tax from 15% to 30%,” he said. “They profited from the public, and I am determined to return the money to citizens.”
Earlier this week, a draft bill promoted by Smotrich was published, proposing a special 15% tax on banks’ excess profits from 2026 through 2030. The tax would apply to profits exceeding 50% of the average profit recorded between 2018 and 2022.
The proposal was released despite opposition from the Bank of Israel and the Finance Ministry’s Budget Department, which argue it could harm the economy and be passed on to consumers. The Bank of Israel estimates the tax would generate about 1.5 billion shekels annually and could lead banks to cancel public relief measures.
Those measures, formulated by the central bank and implemented in April, require banks to provide benefits worth about 3 billion shekels over two years, including cash refunds, fee exemptions, share distributions and cheaper credit.