Discount Bank to Merge Mercantil Bank, Expects Up to $150 Million in Severance
Translated & summarized from Globes by baba
Discount Bank plans to merge with Mercantil Bank, a move estimated to cost between 500 to 600 million shekels in severance for 400 to 550 departing employees. The merger, approved by both banks' boards, is expected to be completed by 2027, pending regulatory approvals. This strategic move aims to improve Discount Bank's efficiency, which is currently the second lowest in the Israeli banking system. Mercantil Bank will initially continue to operate as a separate brand.
The story in 6 lines · by baba
- Discount Bank's merger with Mercantil Bank may cost $135-160 million in severance for departing employees.
- An estimated 400-550 Mercantil employees are expected to leave as part of the merger.
- The average severance package for departing employees is projected to be at least $270,000.
- The merger is slated for implementation by 2027, pending regulatory approvals.
- Discount Bank aims to improve its efficiency, currently the second lowest in Israel.
- Mercantil Bank will initially continue to operate as an independent brand post-merger.
Discount Bank is set to merge with Mercantil Bank, a move that could cost the group between 500 to 600 million shekels (approximately $135 to $160 million) in severance payments for departing employees. Market sources estimate that between 400 to 550 employees will leave Mercantil as part of the merger, with an average severance package of at least one million shekels per employee. Negotiations between Discount Bank, led by CEO Avi Levi, and Mercantil employees regarding severance terms have not yet begun, making these figures preliminary estimates.
The merger, approved by the boards of directors of both banks, is expected to be implemented by 2027, pending regulatory approvals, and may take several years to complete. Lior Shila, a banks analyst at IBI, noted that the full benefits of the merger will likely be realized within three years. Mercantil Bank, which employs around 1,400 people, specializes in serving the Arab and Haredi sectors and is considered a more traditional, branch-heavy bank that contributes significantly to Discount Bank's profitability.
Discount Bank is currently the second least efficient bank in Israel, with an efficiency ratio of 44%, compared to Bank Leumi's ratio of under 25%. Shila suggested that Discount Bank has the potential for improvement, especially with the increasing adoption of AI and digital solutions, which enable leaner operations. Approximately 30 of Mercantil's over 70 branches are located near Discount Bank branches and are expected to be integrated into existing ones, subject to regulatory approval. Initially, Mercantil will continue to operate as an independent brand, with its branches serving customers unchanged.
The same event, reported separately by each outlet. Open a few to compare what different newsrooms emphasize — and what they leave out.
Haredi 3Other 2
Not the same event — other stories that share this one’s people, places, or theme: background, reactions, and follow-ups.
