Antitrust Authority director general Ronit Kan has offered the five largest banks a deal by which they would pay a fine of NIS 290 million as part of a settlement between the banks and the authority. The fine relates to the authority's case against the banks for colluding on fees. Sources inform "Globes" that according to the offer, Bank Leumi (TASE:LUMI), Bank Hapoalim (LSE: 80OA; TASE: POLI) and Israel Discount Bank (TASE:DSCT) will pay NIS 80 million, First International Bank of Israel (TASE:FTIN1; FTIN5)will pay NIS 30 million, and Mizrahi Tefahot Bank (TASE:MZTF) will pay NIS 20 million.
Kan said in March 2008 that she planned launching a civil suit against the five banks because they had been colluding on fees. Her decision was the result of a protracted criminal investigation by the antitrust authority, which suspected that the banks had fixed fees between them. By the end of the investigation, the authority had not succeeded in gathering enough evidence for use in a criminal trial and therefore, she decided to work on the civil level.
On Sunday, Kan and other authority executives led by the authority's legal advisor Adv. Boaz Golan and chief economist Shlomi Prizan met with legally authorized representatives of the banks. The meeting took place, according to the antitrust authority, at the request of the banks to examine ways of reaching an agreed order instead of a civil suit. During the meeting representatives of the authority proposed to the banks a financial arrangement as part of an agreed order amounting to NIS 290 million.
There is no consensus between the banks, regarding their readiness to close the matter with an arrangement, but there was an agreement that the figure of the fine is "unrealistic." A source connected to one of the banks said, "the maximum that the authority has ever reached in an agreed order was NIS 10 million. How did they ever reach these amounts? Even if there was hard evidence of criminal acts it would have ended with a third of the amount that the authority is proposing."
The meeting ended with the banks agreeing to consider the authority's offer. The banks will give their response within ten days of the meeting.
Published by Globes [online], Israel business news - www.globes-online.com - on January 13, 2009
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