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Bethel Finance news:
Israeli banks exposure to the PIIGS - Portugal, Ireland, Italy, Greece, and Spain - was NIS 2.4 billion at the end of September 2011, of which NIS 48 million is classified as problem debt, according to a study by "Globes". NIS 1.74 billion of the exposure is balance sheet credit and the rest is off-balance sheet credit. Half of the exposure - NIS 1.2 billion - is to bonds of banks and financial institutions in these countries.
The PIIGS are classified as problem countries because of the high budget deficits and government debt, jeopardizing their economic stability. Greece is on the verge of bankruptcy, and conditions in Italy and Spain are deteriorating, raising concern about their ability to meet their commitments.
In response, Israeli banks have reduced their exposure to the PIIGS over the past year. Bank Hapoalim (TASE: POLI) reduced its exposure to Italy by hundreds of millions of shekels in 2010, to just NIS 98 million at the end of September 2011.
Half of the Israeli banks' PIIGS exposure is to Spain - NIS 1.16 billion, Exposure to Italy, mostly by Bank Leumi (TASE: LUMI), totals NIS 802 million, and exposure to Ireland totals NIS 432 million. The banks' NIS 13 million exposure to Greece and NIS 3 million exposure to Portugal is negligible.
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