Discount Bank to Absorb Mercantile Bank, Customers to See Gradual Changes

Mercantile Bank will continue to operate as an independent brand, preserving its specialized areas of activity. The bank has a strong presence in the Arab community, where it has the most extensive branch network in Israel, and is growing in the Haredi community, while also serving small and medium-sized businesses and local authorities. Mercantile CEO Barak Nardi, who will lead the merger process, assured customers of service continuity at their existing branches with their familiar bankers.

The consolidation is expected to free up resources for increased investment in technology, digital services, and artificial intelligence. Discount Bank, which reported a net profit of approximately 1.2 billion shekels in the second quarter, has been undergoing an 8% workforce reduction of about 600 employees. Mercantile Bank, which employs about 1,500 staff across 74 branches, reported a net profit of 205 million shekels in the same quarter.

The merger faces opposition from the Mercantile Bank workers' committee, led by Chairman Alex Greenshpan. The committee has warned employees of potential streamlining that could affect hundreds of jobs within two years of the merger, and is expected to oppose the move. The success of the merger will depend on reducing efficiency gaps, as Calcalist noted that Discount Group's operational efficiency has been the weakest in the Israeli banking system.