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Long-Term Players 151 WEST 54TH S TREET BETW EEN SIXTH + SEVENTH AVENUES N E W YORK, N Y 10019 An Interview with Ehud Arnon, President and Chief Executive Offi cer, IDB Bank EDITORS’ NOTE Ehud Arnon most The economy slowed down in When things got diffi cult, we were in no recently served as Senior Executive Israel during the crises, but the Israeli hurry to foreclose, which other banks might Vice President and a member of the banks had the advantage of being to- have had to do. Board of Management and Head tally self-funded with deposits. We It’s the DNA of the group in Israel as well of the Corporate Division of Israel were in the intrabank market because that we have a philosophy that foreclosure is Discount Bank, Ltd. He began his banks our size have to be, but we didn’t the last thing you want to do. career with the Bank of Israel and rely on the intrabank market, and like- When a customer has diffi culties, you work then joined the Exchange National wise for our subsidiary in New York. with him. Our experience has always shown us Bank of Chicago, and thereafter In the U.S., we are a wholly owned that considering the client is doing the best he First International Bank of Israel. subsidiary of Israel Discount Bank Ltd. can, you will do better by working things out Arnon spent the next 20 years at and are a $10-billion bank on a stand- with him and being in it for the long-term rather Bank Hapolalim B.M., and then alone basis. We have always relied on than cutting your losses and running. served HSBC Bank plc as the Head Ehud Arnon our own deposit base, most of which We’re long-term players and there is no of Corporate Division in Israel be- comes from our long-term clients. Hence, reason to change. fore joining Israel Discount Bank in 2007. He when liquidity dried up, it was not a concern for We’re a unique foreign bank in that we’re an holds a Bachelor of Arts in Economics and us because we had ample liquidity domestically. American bank with foreign ownership; we’re not International Relations and a Master of Business Also, this bank has always been very tra- a foreign bank that has a U.S. presence. We’re 25 Administration, both from Hebrew University. ditional and conservative in its lending policies. percent of the group’s balance sheet. The know-your-customer bit is not something There are big European banks that are now COMPANY BRIEF IDB Bank (www. idbbank.com) we do because of regulations; we know our folding their U.S. operations because of problems is a New York State-chartered commercial bank customers and their families and they have been at home. Not only are we not shutting down but and a member of the FDIC. In addition to its banking with us for a long time. we’re expanding. We recently opened private bank- Manhattan headquarters and local branches, Our clients did have a diffi cult period and ing branches in New Jersey and Brooklyn. the bank maintains other full-service branches in our reserves and provisions went up, but not to the Are there opportunities to attract other Southern Florida and Southern California, and extent that it had any major impact on the bank. mid-size bank clients? provides a complete range of personal and com- Throughout the crisis, this bank made The universe of competition for us is the mercial banking, trade services, and innovative money every year, albeit less. We were con- large and medium-size banks. The smaller banks FDIC-insured bank deposit products to U.S. and cerned like everyone else but we needed are not relevant. international clients. Areas of expertise include no governmental assistance, maintaining a But we are proud to compare ourselves Middle Market, Asset Based and Commercial strong capital base throughout. with any bank now. The thing regulators look at Real Estate Lending; Factoring through its di- Is there an effective understanding of IDB is tier-one capital – your basic root capital, your vision, IDB Factors®; Trade Finance; and U.S. Bank both in New York and across the U.S.? equity, and your retained earnings. We don’t and International Private Banking. We’re not a retail entity. We are a whole- have any sub-debt. We only have tier one. BRILLIANT CUISINE sale player, both in our private banking and Under U.S. regulations, a very well capitalized Were you surprised at how deep the eco- commercial endeavors. When that is your pro- bank is at 10 percent; we are above 14 percent. E NJOY SOPHISTICATED CUISINE FROM nomic recession became and how was IDB fi le, then you’re not a household name. We compete for the client who tends to Bank positioned during that time? We’re in the New York area as well as work with the medium-size banks because of THE CULINARY TEAM OF GORDON RAMSAY At the time, I was head of Corporate in IDB Miami and Los Angeles, and we have a South the lack of personal service at the bigger ones. Israel, so it was viewed from an Israeli perspec- American footprint: we own the sixth largest We also do a lot of business with other banks, tive. One of the prime causes of the crises in the bank in Uruguay as a wholly owned subsid- servicing clients jointly. And when we participate U.S. was the handling of mortgages. iary – it’s a billion-dollar operation and a retail or when somebody participates with us in deals The difference is the Israeli mortgage mar- operation, and everyone there knows it. we lead, we like everyone to be active. We’re con- ket is conservative. There is no such thing on Having said that, in the U.S., anyone in the sidered a good participant among our colleagues. a single family mortgage as nonrecourse; it’s markets we’re in – apparel, food, and medium- A niche we developed naturally is Israeli all recourse. The fi rst thing you look at is the sized players in commercial real estate – knows related business, which is an important aspect The luxurious fine dining experience at Gordon Ramsay at The London, artfully serves purchaser’s income and only then at the value us. of our corporate business but not the main of the property; loan-to-value is the second- How challenging is it to differentiate in thrust of what we’re doing. French inspired cuisine with impeccable sophistication. MAZE by Gordon Ramsay offers a lively ary guideline. We won’t give a loan where the this space? What are you focused on to make sure monthly repayment is more than 30 percent of Our business is all personal. Many talk IDB remains a leader in the space? surrounding from which to enjoy a French influenced seasonal menu served among chic interiors. the person’s income. about it; we actually do it. It’s not part of our The key element is not planning for the Also, in Israel, everyone is part of an ex- DNA to have a 1-800 number, be it on the com- next six months but looking at where we want tended family. If you get into trouble on your mercial side of our business or in our private to be in fi ve years and planning backward from mortgage, someone in your family will probably banking endeavor. And we’re expanding our there. We’re long-term players and we’re not help you out. footprint in local private banking. interested only in the next quarter’s P&L.• For reservations, call 212.468.8889 or visit us at TheLondonNYC.com/Gordon-Ramsay. VOLUME 35, NUMBER 4 POSTED WITH PERMISSION. COPYRIGHT © 2012 LEADERS MAGAZINE, INC. LEADERS 139 LNY-2169Untitled-17 LeadersMagazineMag.indd 2 1 8/7/20128/6/12 12:55:10 5:01 PM PM.

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