Two more major Israeli banks announced heavy losses for last year and the heads of both blamed government policies for their predicament.
The Bank Leumi, Israel’s largest bank, published its balance sheet Friday, showing a loss in 1983 of 7.750 billion Shekels ($43million). On Sunday, the Bank Hapoalim released its balance sheet showing a 10.9 billion Shekel loss in 1983 compared to a profit the previous year. It was the most severe loss of any of the major banks so far.
Last week the Mizrachi Bank announced that it had lost 948 million Shekels ($5.4 million) in 1983 in contrast to a 1.3 billion Shekel ($7.7 million) profit in 1982.
All of the losses announced were adjusted for inflation. The Bank Hapoalim’s figures showed a nominal decline of 28 percent and a real drop of 74 percent compared to the previous year.
GOVERNMENT HELD RESPONSIBLE
Giora Gazit, chairman of the Bank Hapoalim board, held the government responsible for the adversity but was less outspoken than his colleagues at the other two banks. Bank Leumi chairman Ernst Jafet said the government’s economic and fiscal policies caused the public to lose confidence in the Shekel and in bank stocks, resulting in the mass dumping of bank securities and withdrawal of deposits in order to buy U.S. Dollars. This resulted in severe liquidity problems for the banks, he said.
A similar statement was made by Aharon Meir, president of the Mizrachi Bank, when its losses were announced. The fourth major bank, the Israel Discount Bank, has not yet released its 1983 balance sheet.
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