Bank Leumi stock chart (Google Finance Snippet)

Leumi Overtakes Teva as the Largest Company on the TASE

Details
The Judean Staff
Finance

While banks across Western nations entice customers with free checking, fee-less ATM withdrawals, and attractive incentives, Israeli banks have charted a path of their own—one paved with relentless fees, high-interest rates, and widespread consumer dissatisfaction. Ask any Israeli about their biggest financial grievance, and odds are they’ll point straight to the banking industry.

From the seemingly trivial charges on every account action—such as printing past statements—to the exorbitant interest fees embedded within a rigid monthly banking cycle, Israeli banks have mastered the art of squeezing customers dry. The lack of stringent regulatory oversight has only emboldened these financial institutions, turning them into some of the most profitable entities in the country.

Banking Sector: The Powerhouse of Israeli Markets

This relentless monetization strategy has propelled Israeli banks to dominate the nation's financial landscape, not just in 2024 but for years prior. The banking sector has solidified itself as the undisputed leader of the Israeli stock market, outpacing nearly every other industry. With consistent and lucrative returns on equity, banks have emerged as the safest and most rewarding investments of the past decade.

Despite constant chatter about increased competition from credit card companies, such challenges never seem to materialize. The reason? The Bank of Israel and financial regulators prioritize stability over competition. And stability, in this case, translates directly into profitability.

Leumi Bank Reigns Supreme

Leading this financial empire is none other than Bank Leumi, which has now overtaken Teva to become the most valuable company in Israel, boasting a staggering market capitalization of 70.2 billion shekels. The bank’s stock skyrocketed by 52% in 2024 and has already climbed an additional 7.8% this year.

Under the astute leadership of CEO Hanan Friedman, Leumi has widened its lead over its longtime rival, Bank Hapoalim, now surpassing it by an impressive 7 billion shekels. What was once a neck-and-neck battle for supremacy has turned into a decisive victory for Leumi.

The bank's financials paint an even rosier picture:

  • Return on equity for the first nine months of 2024: 17.1%
  • Net profit: 7.3 billion shekels (a jaw-dropping 41.2% increase from 2023’s 5.2 billion shekels)

Teva’s Decline: The Changing of the Guard

Leumi’s ascent comes at the expense of Teva, Israel’s once-dominant pharmaceutical titan. Despite doubling in value last year and briefly reclaiming the top spot, Teva’s recent struggles and a bleak financial outlook led to a sharp 20% drop in its stock. That decline solidified Leumi’s dominance, leaving Teva as the second-most valuable company in the country.

While Teva still poses a threat to Leumi’s reign, the bank is currently unchallenged at the summit of Israel’s corporate hierarchy.

The Impressive Returns of Israeli Banks

Even amid potential economic headwinds, Israeli banks continue to deliver unparalleled returns. Leumi currently trades at a price-to-book ratio of 1.16, while Bank Hapoalim hovers at 1.1. The broader banking sector is expected to yield a return on equity of around 15%. Even under conservative estimates, these numbers suggest an implied return of 11%-12% on market value—extraordinary figures for the banking world.

While risks do loom on the horizon—including potential interest rate cuts and increased payouts on public deposits—banks remain well-positioned. Their growing equity base ensures that even if returns on equity decline slightly, absolute profits are likely to remain robust.

Banking Sector Efficiency: The Monopoly Tightens Its Grip

Over the past two decades, Israeli banks have aggressively streamlined their operations. The number of financial institutions has dwindled, leaving only a few dominant players to divide the profits. With fewer banks, competition has all but vanished, further strengthening their grip on the market.

Meanwhile, digital transformation efforts and workforce reductions have significantly boosted efficiency. The efficiency ratio across Israel’s banking system has plummeted from over 60% in 2018 to below 40% today. At Bank Leumi, the ratio now stands at an astonishing 29.6%—a stark improvement from the already impressive 31.4% recorded a year prior.

What Lies Ahead?

According to Aviad Sapir, an investment manager at Migdal Capital Markets, "The four key drivers pushing banks forward are interest rates, inflation levels, efficiency measures, and overall economic activity. Looking ahead to the coming year, it appears that Israeli banks will continue to benefit from progress on all four fronts."

Given the current trajectory, Israeli banks are poised to remain the undisputed kings of the country’s financial sector. With consumer frustration mounting and competition nowhere in sight, one thing is clear: the banking monopoly is here to stay, and it's only getting stronger.

Sign Up For The Judean Newsletter

 I agree with the Terms and conditions and the Privacy policy

About Us

The Judean is a digital media platform committed to exposing the truth about Israel and confronting the global wave of anti-Zionist disinformation. Through powerful editorials, featured articles, and historical investigations, we bring clarity to Israel’s story — its ancient Jewish roots, modern democratic values, and ongoing struggle for truth in the media battlefield. At a time when propaganda threatens to rewrite history and vilify Jewish self-determination, The Judean stands as a proud voice of resistance. We exist not to appease, but to assert: Israel is the ancestral homeland of the Jewish people — and that truth is non-negotiable.
Modi'in, Israel 71702
info@thejudean.com