Bank Ash to Raise $40 Million After Sale to Isracard Falls Through

Four months after negotiations for the sale of Bank Ash to Isracard collapsed, the bank is initiating a fundraising effort to raise NIS 150 million ($40 million). Co-owner Nir Tsouk is expected to provide the majority of the capital, with the bank also in discussions with institutional investors, including insurance companies, to bring in a new partner. The fundraising is based on a valuation of NIS 500 million ($133 million), the same valuation that was intended for the Isracard deal. Isracard had signed a memorandum of understanding in March to acquire the bank for NIS 400-500 million, along with an additional NIS 120 million investment in the bank's technology arm at a NIS 380 million valuation. The current fundraising will not include the technology company. The amount of the investment was determined at the demand of the Bank of Israel, based on the bank's operational plans. Bank Ash received its banking license from the Bank of Israel in late 2022 and had planned to open to the public in early 2026, a timeline that has not yet been met. The bank intends to offer checking accounts, credit products, and financial services for households and small businesses, sharing 50% of interest income with customers. Bank Ash hopes that a new bill allowing institutional entities to hold stakes in "thin banks" will facilitate the entry of institutional investors. The fundraising is necessary to enable the bank to provide increased credit to customers upon its public launch. Bank Ash is one of three "thin banks" slated to operate in Israel to boost competition. Last week, the Bank of Israel granted a conditional banking license to Revolut Israel, which will initially focus on currency exchange and money transfers, with plans to expand to checking accounts, securities trading, and deposits. Another existing thin bank, One Zero, with 200,000 customers, is also seeking institutional investment. One Zero's controlling owner, Amnon Shashua, has begun talks to sell his controlling stake for NIS 1.2 billion ($320 million), with potential buyers including Meitav Investment House, Moty Ben-Moshe, and Isracard.