June 30, 2019 / 6:29 AM / 21 days ago

Israel's Bank Leumi CEO to resign, new chairman named

TEL AVIV (Reuters) - Bank Leumi said on Sunday Chief Executive Rakefet Russak-Aminoach will step down in the coming months after seven years as head of Israel’s biggest bank by market capitalization.

FILE PHOTO - Pedestrians are reflected in the windows of a branch of Bank Leumi, Israel's second-largest lender, in Tel Aviv, Israel May 30, 2013. REUTERS/Nir Elias/File Photo

The bank’s board also chose board member Samer Haj Yehia as Leumi’s new chairman.

Russak-Aminoach, who joined Leumi in 2004 as head of the business division, did not provide a reason for her decision in a letter to the bank’s outgoing chairman, David Brodet.

“I have decided the time has come to leave my post,” she said in the letter.

Leumi said Russak-Aminoach’s resignation would take effect after the bank’s board chooses a replacement for her.

Russak-Aminoach said she decided to announce her decision before the board chose a new chairman to replace Brodet, who is leaving Leumi in July after nine years.

The board met hours later and named a new chairman.

Haj Yehia, a director at Leumi since 2014, had been the first Arab board member of a major Israeli bank. He has a doctorate in economics from Massachusetts Institute of Technology and served as a vice president of Fidelity Capital Markets between 2006 and 2012.

The appointment still needs approval from Israel’s banking regulator.

Leumi shares fell 1.8% on Sunday in Tel Aviv.

Under Russak-Aminoach’s leadership Leumi was the first of Israel’s banks to reach a settlement with U.S. authorities following an investigation into tax evasion by its U.S. clients, agreeing to pay a $400 million fine.

Leumi’s chief rival, Hapoalim, is still seeking to reach a final settlement in a similar inquiry.

Hapoalim is also seeking a new CEO after Arik Pinto said he planned to step down at the end of 2019.

Israel Discount Bank, the country’s fourth largest lender, is also searching for a new CEO after Lilach Asher-Topilsky announced earlier this month she would step down to become a partner at the FIMI Fund.

In 2016, Israel passed a law capping bank executive compensation at 2.5 million shekels ($700,000) a year. Before this came into effect, remuneration for senior banks had risen to as much as 8 million shekels a year.

“In our view these moves are not surprising given that salaries at banks are capped,” said Barclays analyst Tavy Rosner, noting bank salaries currently imply a reduction of as much as 70 percent from before the law was passed.

Reporting by Tova Cohen and Steven Scheer; Editing by Alexander Smith and David Evans

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