Discount Bank Seeks to Retain Credit Card Arm Amid Sale Delays

Discount Bank is attempting to reverse course and keep its credit card company, Cal, after a year of delays in its sale. The bank is obligated to divest its 72% stake by mid-2024 as part of regulations separating credit card companies from banks. In a letter to the Bank of Israel and the Ministry of Finance, Discount Bank CEO Eli Levi requested the cancellation of the divestment requirement, allowing the bank to retain control of Cal.

Previous attempts to sell Cal were stalled by disagreements between the Antitrust Authority and the potential buyers, Horesh-Harel. Discount Bank argues that selling Cal is further complicated by the International Bank, which holds the remaining 28% of shares and has veto power over a stock exchange listing, which it opposes. Discount Bank believes finding an alternative buyer within the remaining timeframe is unlikely, especially since the original sale agreement was signed a year ago but has yet to receive regulatory approval.

In contrast, Bank Leumi and Bank Poalim have already sold their stakes in competing credit card companies. Discount Bank's request highlights the challenges faced in completing the mandated separation of credit card operations from traditional banking.