Israeli Banks Struggle With Public Trust Despite Strong Profits and Advertising Efforts

Over the past year, Israeli banks have intensified their advertising campaigns to improve their public image, yet a recent Globes brand index reveals a persistent gap between public perception and profitability. Major banks like Bank Leumi and Bank Hapoalim rank in the middle of the overall brand index, at positions 176 and 178 respectively, while smaller banks such as Bank Jerusalem rank much lower, at 316. Although the public enjoys the entertaining advertisements, negative experiences, especially related to mortgages, continue to impact their trust.

The banking sector faces challenges beyond image issues, including a changing interest rate environment and a significant tax imposed by Finance Minister Bezalel Smotrich. This year, banks will pay a hefty 3 billion shekels tax to help reduce the state deficit caused by the ongoing war, with a smaller 125 million shekels tax planned for next year. Despite these pressures, the five largest banks reported a combined net profit of 7 billion shekels in the first three quarters of 2026, though this marks a 7% decline compared to the previous year.

Branding efforts have included celebrity endorsements and comedic advertising, with Bank Leumi and Bank Hapoalim leading in brand effectiveness. Bank Yahav’s surprising brand success is attributed to its use of comedian Eran Zarhovich, while Bank Hapoalim also leveraged comedian Liat Har Lev. Smaller banks like Bank Otzar Ha-Hayal have also achieved relatively high brand recognition despite limited recent campaigns.

However, the public remains wary due to banks’ low deposit interest rates and high loan costs, which overshadow advertising gains. Digital banks like One Zero, despite offering higher deposit rates, have not yet gained significant public affection, partly due to smaller advertising budgets. Looking ahead, the acquisition of the digital bank "Eshe" by Isracard, controlled by the Delek Group, and potential reforms encouraging more small banks could increase competition and improve consumer conditions.

In summary, while Israeli banks maintain strong financial results and invest heavily in marketing, public trust remains fragile, with the hope that increased competition and better customer terms might eventually bridge the gap between brand image and consumer sentiment.