Bank Leumi Establishing Subsidiary Securities Company in New York

The Bank Leumi Le Israel is establishing a subsidiary securities company in New York to deal in Israeli securities and create a market for Israeli issues, Dr. Y. Foerder, chairman of the bank, announced today. The new company, to be known as the Leumi Securities Corporation, will begin operation in a month. It will work in close technical cooperation with the New York Hanseatic Corporation, a member of the American Stock Exchange and one of the major over-the-counter dealers in the market. Israel Frumkin, a member of the New York staff of Bank Leumi, will be manager of the new operation.

The new securities company will buy and sell all types of Israeli securities at rates paralleling the Tel Aviv market quotations. It will also deal in State of Israel bonds.

Commenting on the announcement that the Bank Leumi is offering through American and European underwriters a new issue of shares, the first underwritten offering of Bank Leumi shares in the United States, Dr. Foerder pointed out today that Israeli banks are generally under-capitalized in comparison to banks in other countries. The general ratio outside Israel, he said, was one dollar of capital to every ten dollars of deposits. Israeli banks, however, he said, averaged only two-and-one-half to three-and-one-half percent of capital in relation to deposits. He said Israel wanted to put its banks into the customary pattern and framework of the world banking institutions.

Dr. Foerder announced the promotion of Gideon Strauss to executive vice-president in charge of the bank’s New York office, and of Theodore K. Landau, Phineas Spinrad and Ben-Zion Melech to vice-presidents.