Bethel Finance: Two senior managers leave Mercantile Discount

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Bethel Finance news:
Two senior managers at Mercantile Discount Bank, Ram Hermelech, who is deputy CEO and heads the business division, and Israel Ehrlich, VP and head of the retail division, have announced their resignations. This follows changes in the bank’s activity arising from the Israel Discount Bank (TASE: DSCT) group’s new strategic plan. Mercantile Discount Bank’s CEO is Jacob Tennenbaum, and its chairman in Yossi Bachar, who is also chairman of Israel Discount Bank. In the coming weeks, Discount Group CEO Reuven Spiegel is due to replace Bachar and to become chairman of Mercantile Discount as well.

Mercantile Discount Bank is wholly owned by Israel Discount Bank. It is Israel’s seventh largest bank, with 80 branches. Its balance sheet footing NIS 24.4 billion, and deposits from the public total NIS 20.4 billion. Profit on regular activities in the first nine months of 2011 was NIS 105 million.

Under the planned changes, Mercantile Discount will substantially reduce its activity in the business sector, and will focus mainly on retail and commercial banking (middle market). This is part of a plan aimed concentrating the group’s corporate credit activity in parent company Israel Discount Bank. At the same time, Mercantile Discount will deepen its retail activity, and continue to focus on the Arab and haredi (ultra-orthodox Jewish) sectors. Mercantile Discount has credit to the public of NIS 15.2 billion, with corporate credit totaling NIS 4.8 billion and representing 31% of the bank’s credit activity. The corporate sector contributes a third of the bank’s profit.

In response to the change, senior VPs Hermelech and Ehrlich decided to resign. Hermelech, 55, is one of the bank’s longest standing managers, and has been in his post since 1998. He set up Mercantile Discount’s corporate credit activity. Ehrlich, 57, has been in his post since 2006. He was previously CEO of Carmel Mortgage Bank, until it was sold to Union Bank of Israel. Both will stay in their jobs until they leave in April.