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Israel
Bank Leumi le-Israel
Bank Leumi reckons it is the major indigenous provider of cus-
tody services to global investment banks and global custodians
trading and investing in the Israeli market. The average scores,
though not outstanding, have the virtue of consistency. They
also conceal some important truths. If the relationship between
Leumi and its international clients is not yet conjoint, trades are
settled on time, respondents like their RMs, and any doubts that
the bank wants to keep and grow international business is ban-
ished. “Relationship is really good,” says a client. “Reactiveness
and efficiency.” Respondents also agree that Leumi is a large and
valuable source of liquidity and appreciate the leverage the bank
can exert on their behalf with local regulators. The introduction
by Leumi of a dedicated corporate actions team is clearly having
an effect. Being less exposed to the eye-catching digital bank
for retail customers that Leumi has launched – Hello Pepper –
custody clients have yet to appreciate an appetite for innovation,
but even a less-than-outstanding set of average scores cannot
dispel a sense that Leumi is now the Israeli bank that wants to
do what is necessary to win and retain inbound business. “Keep
on the excellent work!” writes one client.
Bank Hapoalim
There is not much to choose between the external perceptions
of the indigenous rivals, and much the same is true of internal
perceptions. The other Israeli sub-custodian also lays claim to
a dominant share of inbound business. Hapoalim has, however,
attracted a smaller number of responses. The details indicate
clients are happy with the bank as a counterparty, believe their
cash and securities are safe with Hapoalim, and are sure it
insulates them from local regulatory risk. They agree that its
settlement services and technology function effectively and
(unusually) are glad to find the bank is relatively open-minded
when it comes to investing cash and executing foreign ex-
change transactions. Where respondents are less convinced that
Hapoalim is getting it right, to either local or global standards,
is on the personal side. The scores for relationship management
and client service are not among its best.
Citi
More than a decade has passed since Citi responded to calls
from network managers and opened a direct custody and clear-
ing operation in Tel Aviv. The average respondent reckons the
global sub-custodian is still doing a better job that its local rivals
in three out of four areas, and it is ahead by a distance in areas
where Citi chooses to excel, such as settlement and technology.
Its vulnerabilities are venial, even on price, where respondents
fail in the end to yield to the temptation that Citi is more ex-
pensive than the local alternatives – not least because, for most,
Israel is but one market among many where they use the bank.
Mizrahi Tefahot Bank
Mizrahi Tefahot bank did not attract enough responses to be
assessed, but it is clear from the scores that its custody service is
competitive on pricing.
WEIGHTED AVERAGE SCORES
Bank Leumi le-Israel Citi Bank Hapoalim Mizrahi Tefahot Bank
Market share (% of responses) 41% 32% 23% 5%
Relationship management 5.57 4.90 4.31 n/a
Market Average Global Average
4.75 5.20
Client service 5.79 5.12 4.55 n/a 4.94 5.40
Account management 5.11 4.87 5.32 n/a 5.09 5.44
Asset safety 4.43 5.80 5.42 n/a 5.53 5.68
Risk management 4.81 5.27 5.60 n/a 5.28 5.46
Liquidity management 3.04 6.16 5.21 n/a 5.23 4.89
Regulation and compliance 6.03 5.59 5.75 n/a 5.72 5.64
Innovation 5.32 5.22 4.95 n/a 5.10 5.18
Asset servicing 4.61 5.47 5.22 n/a 5.14 5.09
Pricing 4.01 4.87 4.84 n/a 4.84 4.82
Technology 5.56 5.76 5.58 n/a 5.66 5.28
Cash management and FX 5.04 4.83 4.81 n/a 4.85 4.25
Total 5.13 5.20 5.10 n/a 5.13 5.24
Fall 2018
globalcustodian.com
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