Mizrachi Bank Announces a 948 Million Shekel Loss Last Year

The Mizrachi Bank, one of the four largest in Israel, announced a 948 million Shekel loss last year, the equivalent of $5.4 million at the current exchange rate. This compared to a 1.3 billion Shekel ($7.7 million) profit in 1982.

The annual balance sheet was published yesterday. Bank president Aharon Meir blamed the red ink on the government’s economic and financial policies which, he said, drained public confidence in the Shekel and drove investors and customers to the U.S. Dollar. Israel’s other major banks will publish their balance sheets in the next few days and all are expected to show a loss, according to banking circles.

The banks have been trying, without success, to persuade the Bank of Israel and the Treasury to reconsider their excess profits tax policy so that banks can present a better picture to customers at home and abroad. The banks claim government policy has created liquidity problems as depositors withdrew Shekels to buy Dollars.

Public confidence in the banks was severely damaged last year by the sudden collapse in the price of bank shares, a favorite form of savings. This occurred after the banks were forced by financial exigencies to stop shoring up the value of their shares.

Israeli wage-earners are also glum. While they will receive a 38.2 percent cost-of-living increment on their April salaries, it will be eroded by the expected 20 percent rise in the consumer price index for April.

Meanwhile, the value of the Shekel continues to decline. The Tel Aviv black market rate today was 200 Shekels to $1. a 1.8 percent devaluation over the weekend.