Bank Leumi CEO Hanan Friedman Discusses Record Profits and Future Plans

Hanan Friedman, CEO of Bank Leumi, has been recognized as the highest-ranked bank CEO in Globes' project on leading executives, following a period of unprecedented success for the bank. Under his leadership, Bank Leumi achieved its highest-ever profit in the Israeli banking system and its lowest efficiency ratio, indicating high operational efficiency. In the second quarter of the year, the bank reported a net profit of NIS 2.83 billion, a return on equity of 16.3%, and an efficiency ratio of 24.7%, which is among the lowest globally.

Friedman, 54, who has led the bank for seven years, attributes this success to early adoption of AI technology and strategic investment in national infrastructure. He established a dedicated AI center reporting directly to him to accelerate the integration of artificial intelligence tools across business lines and headquarters. Furthermore, the bank identified national infrastructure as a key growth area, creating a specialized unit to focus on transportation, energy, and AI development, crucial for rebuilding Israel and accommodating population growth.

Despite record profits, the banking sector faces public criticism and a special NIS 3 billion tax imposed by the government. Friedman argues that this tax unfairly burdens the public, as Bank Leumi, being publicly owned through pension and savings funds, returns its profits to the public via investment value and dividends. He highlighted the bank's significant contributions to Israeli society, especially post-October 7th, citing projects like funding a camp for children from the Gaza border and providing hotel stays for elderly individuals without bomb shelters.

Friedman also addressed concerns that the pursuit of a low efficiency ratio might compromise customer service, asserting that cost management does not negatively impact service quality. He emphasized daily monitoring of service metrics and the bank's 24/7 operation of its call centers with skilled bankers, aiming for the top position in customer service.

Regarding a controversial investment by Leumi Partners in the Landora group, owner of the Japnika chain, Friedman stated that the deal underwent thorough due diligence and remains a strong business transaction despite subsequent criminal events. He also criticized the law capping senior executive salaries in banks as discriminatory and illogical within a free economy, noting that foreign investors find it difficult to comprehend.

Looking ahead, Friedman expressed his satisfaction with his role and his commitment to further innovation, particularly in service and AI implementation, stating he is "far from exhausting" his potential in these areas.