Discount Bank to Pay Up to $270,000 Per Employee in Mercantile Merger

Discount Bank is expected to pay between NIS 500 million and NIS 600 million in severance packages to employees of Mercantile Bank who will leave as part of their upcoming merger. Estimates suggest that each departing employee could receive approximately NIS 1 million (about $270,000). The merger, which was approved by the boards of both banks, is anticipated to be implemented during 2027, pending regulatory approval, and may take several years to complete.

Between 400 and 550 employees, representing 30% to 40% of Mercantile Bank's approximately 1,400 staff, are expected to take voluntary retirement. Negotiations between Mercantile Bank's management, led by Avi Levi, and the employees regarding the terms of departure have not yet begun, making these figures preliminary estimates. Discount Bank has declined to comment on the matter.

Analysts believe the merger will enhance efficiency, though the full savings for Discount Bank are not yet quantifiable. Lior Shilo, a bank analyst at IBI, noted that while the merger process is lengthy, its "real fruits" will be visible within three years. He added that Discount Bank needs to become more efficient and digital, a process facilitated by AI, and that this move, though somewhat delayed, is positive.

Mercantile Bank, which specializes in serving the Arab and Haredi sectors, is considered a more traditional bank with numerous branches and a significant contributor to Discount Bank's profitability. The combined entity will operate around 170 branches. Approximately 30 Mercantile Bank branches are located near existing Discount Bank branches and are expected to be integrated, subject to regulatory approval. Initially, Mercantile Bank will continue to operate as an independent brand, with its branches serving customers unchanged.