Bank of Jerusalem and Migdal Launch 400 Million Shekel Credit Line for Jumbo Home Loans

Bank of Jerusalem and insurance and finance company Migdal have signed a joint financing agreement to establish a 400 million shekel credit facility. This facility will provide "jumbo loans," which are large private loans secured by residential property collateral. The collaboration will operate under a revolving mechanism for three and a half years, where repayments from existing loans will fund new loans throughout the period.

Under the agreement, Bank of Jerusalem will manage operations, including borrower identification, risk assessment, underwriting, credit provision, and loan servicing. Migdal will contribute funding from the savings it manages. This structure leverages each party's strengths while complying with regulatory requirements: the bank can expand its lending and fee income without compromising capital adequacy by sharing funding with an institutional partner, while Migdal gains exposure to secured retail credit without needing to build its own customer service and operations.

This deal builds on the ongoing strategic partnership between the two firms, which has previously involved nearly one billion shekels in transactions. Migdal has previously purchased mortgage portfolios from Bank of Jerusalem totaling approximately 680 million shekels. Unlike those past transactions, which involved selling existing portfolios to free up capital, this is the first time the parties have created a revolving syndicated credit line for joint jumbo loan issuance from the outset.

The deal was initiated and led on the bank's side by Oded Kravitz, head of financial innovation, with legal support from attorney Yossi Elchaik. On Migdal's side, the initiative was led by Shiran Blau, head of the mortgage department.