Who Owns Mizrahi Tefahot Bank Company?

Who Owns Mizrahi Tefahot Bank?

Understanding the ownership of Mizrahi Tefahot Bank is key to its strategic direction. The 1995 privatization marked a significant shift, with the Ofer-Wertheim Group acquiring a substantial stake.

Founded in 1923 by the World Mizrachi Movement, the bank initially served affiliated enterprises and the broader Jewish community. Today, it's Israel's third-largest bank by assets.

Who owns Mizrahi Tefahot Bank?

The origins of Mizrahi Tefahot Bank trace back to 1923 when the World Mizrachi Movement established Mizrahi Bank. Its initial purpose was to support the financial endeavors of individuals and organizations within the Mizrachi Organization, while also serving as a national financial institution for the broader Jewish community in the Yishuv.

Founding Entity

Mizrahi Bank was founded in 1923 by the World Mizrachi Movement. The aim was to provide financial services to its affiliated enterprises and the Jewish community.

Initial Purpose

The bank was established to offer financial assistance and serve as a financial instrument for the Mizrachi Organization's activities. It also aimed to be a national public bank for the Jewish community.

Early Ownership Structure

Specific details on initial equity splits or shareholding percentages among the founders from the World Mizrachi Movement are not readily available. The founding vision emphasized a community-focused approach.

Merger and Expansion

In 1969, Mizrahi Bank merged with Hapoel Hamizrahi Bank, forming United Mizrahi Bank Ltd. This merger significantly expanded its network to 42 branches.

State Ownership Period

A pivotal change occurred in 1983 when the bank's ownership was transferred to the State of Israel. This state ownership marked a new chapter in its history.

Privatization Commencement

The period of state ownership concluded with the initiation of a privatization process in 1995. This set the stage for future ownership changes and market participation.

The merger in 1969 with Hapoel Hamizrahi Bank resulted in United Mizrahi Bank Ltd., which boasted 42 branches and managed assets exceeding 400 million Israeli Lira at that time. The bank's journey through state ownership began in 1983, a phase that concluded with the commencement of its privatization in 1995, paving the way for its current ownership structure. Understanding this historical trajectory is crucial for grasping the current Mizrahi Tefahot Bank ownership and who owns Mizrahi Tefahot Bank today. The bank's evolution reflects significant shifts in its operational scale and governance over the decades, influencing its position as a major financial institution. This historical context is also relevant when considering the Growth Strategy of Mizrahi Tefahot Bank.

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The ownership journey of Mizrahi Tefahot Bank began with state control, transitioning to private hands in 1995. This shift was initiated by the acquisition of a significant stake by the Ofer-Wertheim Group, marking a new era for the institution. The bank's shares have been available on the Tel-Aviv Stock Exchange since 1963, allowing for public participation in its ownership.

Currently, the Mizrahi Tefahot Bank ownership structure is primarily characterized by the joint control of the Ofer and Wertheim groups, who together hold approximately 41.32% of the bank's shares as of March 31, 2025. The remaining portion of the bank's shares is publicly traded on the Tel-Aviv Stock Exchange. Beyond the controlling shareholders, a diverse group of institutional investors also maintains substantial stakes, contributing to the bank's broad shareholder base. These include entities such as M.W.Z. Holdings Ltd., Harel Pensions and Gemel Ltd., Migdal Mutual Funds Ltd., The Vanguard Group, Inc., More Investment House Ltd., Phoenix Excellence Pension and Provident Ltd., BlackRock, Inc., Yelin Lapidot Holdings Ltd., Psagot Mutual Funds Ltd., and Ayalon Mutual Funds Ltd. The bank's financial health is reflected in its shareholders' equity, which reached NIS 31.3 billion by December 31, 2024, a notable increase of 14.0% from NIS 27.5 billion at the close of 2023. This growth enabled the distribution of NIS 2,182 million in dividends for 2024 earnings, with the controlling families benefiting from roughly half of this distribution.

Key Mergers Shaping the Bank

Strategic mergers have significantly influenced the company structure of Mizrahi Tefahot Bank, consolidating its market presence. These integrations have strengthened its position as a leading financial institution in Israel.

• Merger of United Mizrahi Bank Ltd. and Tefahot Israel Mortgage Bank Ltd. in early 2005, forming Mizrahi-Tefahot Bank Ltd.
• Integration of Adanim Bank, a wholly owned subsidiary, in Q1 2009.
• Acquisition of all shares of Bank Igud (Union Bank of Israel) completed by end of September 2020.
• Finalization of Bank Igud merger into Mizrahi-Tefahot by end of 2022.
• These consolidations enhance its competitive standing, as seen in the Competitors Landscape of Mizrahi Tefahot Bank.

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The Board of Directors at Mizrahi Tefahot Bank is instrumental in guiding the institution's strategic direction and ensuring robust corporate governance. Avraham Zeldman currently serves as the Chairman of the Board. The board comprises directors such as Gilad Rabinobich, Hannah Feuer, Moshe Vidman, Estery Giloz-Ran, Eli Alroy, Ron Gazit, Jonathan Kaplan, Ilan David Kremer, and Joseph Fellus.

The voting power within Mizrahi Tefahot Bank is structured to reflect its ownership. While public shareholders typically operate on a one-share-one-vote principle, the combined stake of the controlling shareholders, the Ofer and Wertheim groups, stands at approximately 41.32% as of March 31, 2025. This significant holding grants them considerable influence over key decisions. Shareholder meetings require a quorum of at least two shareholders representing 25% or more of the voting rights. Furthermore, specific resolutions necessitate approval from a majority of shareholders who are not considered controlling shareholders or do not have a personal interest in the matter, a mechanism designed to safeguard minority interests.

Understanding Shareholder Influence

The voting structure at Mizrahi Tefahot Bank balances the influence of major shareholders with protections for minority investors. Understanding this dynamic is key to grasping the bank's decision-making processes.

• Public shareholders generally follow a one-share-one-vote system.
• Controlling shareholders hold a substantial combined stake of 41.32% as of March 31, 2025.
• A quorum requires at least two shareholders holding 25% of voting rights.
• Certain resolutions need a majority vote from non-controlling, disinterested shareholders.
• This structure impacts the overall Target Market of Mizrahi Tefahot Bank.

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In recent years, Mizrahi Tefahot Bank has maintained a stable ownership structure, with its controlling shareholders, the Wertheim and Ofer families, holding a significant stake. This stability has coincided with strong financial performance and strategic growth initiatives, indicating a consistent direction for the bank.

The bank's financial health has been robust, with a record net profit of NIS 5,455 million in 2024, marking an 11.1% increase from the previous year. This profitability has allowed for substantial dividend distributions, with approximately half of the NIS 2,182 million distributed in 2024 going to the controlling owners. The first quarter of 2025 continued this trend, with a net profit of NIS 1,290 million and a dividend payout of NIS 516 million. The controlling shareholders, representing the Wertheim and Ofer groups, maintained their combined ownership at approximately 41.32% as of March 31, 2025, demonstrating a consistent commitment to their stake in the bank.

Controlling Ownership Stability

The Wertheim and Ofer families, as the Mizrahi Tefahot Bank controlling shareholder, have maintained their significant ownership of approximately 41.32% as of March 31, 2025. This consistent stake underscores a stable ownership environment for the bank.

Financial Performance and Dividends

Mizrahi Tefahot Bank reported a record net profit of NIS 5,455 million in 2024, a rise of 11.1% from 2023. This strong performance facilitated a total dividend distribution of NIS 2,182 million in 2024.

Strategic Growth Objectives

The bank's strategic plan for 2025-2027 targets an increase in credit market share from around 21.5% in late 2024 to 23%-24%. Deposit market share is also projected to grow from 18.4% to 20%-21%.

Institutional Investor Presence

Mizrahi Tefahot Bank shareholders include significant institutional investors such as Harel Pensions and Gemel Ltd., Migdal Mutual Funds Ltd., The Vanguard Group, Inc., and BlackRock, Inc. The bank also successfully raised 4.5 billion shekels from institutional investors through a bond offering on July 16, 2025.

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