EXAMINER OF BANKS

ANNUAL STATISTICS OF THE BANKING SYSTEM 1975-1979

CON TEN T S

Page 1. Introduction...... xi 2. Institutions Included in the Digest •••••••••••••••.••.•.•••••••••.• xi 3. Division of Banking Institutions According to Size ••••••••••••..••• xv 4. Source of Statistical Data .•.••.•••.••••••••••••••••••••••••••••.•• xvi 5. Definitions ••••••••••••••••••••••••••.••••••• ,...... xvii 6. Reclassification of Reported Items ••••••••••••••••••••••••••••••••• xxiii

CHAPTER I - GENERAL DATA, ASSETS, AND LIABILITIES

Table 1-1: Assets and Liabilities of the Banking Institutions, 1975- 1979 •••••••••••••••••••••••.•.••.•••.•••••••••••••••••••••••••••• 3 Table 1-2: Indicators for Development of the Banking System, 1954-1979 19 Table 1-3: Assets and Liabilities of Mortgage Banks, 1975-1979 •••••••• 20 Table 1-4: Assets and Liabilities of InveStment Banks, 1975-1979 .••••• 25 Table 1-5: Assets and Liabilities of Financial Institutions, 1975-1979 28 Table 1-6: Assets and Liabilities of Israeli Bank Branches in the Administered Areas, 1975-1979 ••••••••••.•••.••.•••.•••••••••.•••• 32 Table 1-7: Condensed Consolidated Balance Sheets of the Five Major Banking Groups, 1975-1979 •••••.•••••••••••••••••••••••••••••••••• 34 Table 1-8: Condensed Balance Sheets of the Industrial Investment Banks, 1978-1979 ••••••••••.•.•••..••••••••••••••••••••••••••••••••••.•.• 36 Table 1-9: Consumer Price Index and Exchange Rates of US $ and Deutsche Mark, 1975-1979 ••••••••..••••••.•.•••••••••••.•••••••••.••••••••• 38 Table 1-10: Exchange Rates of Certain Currencies - Representative Rates (Transfers and Cheeks), 1975-1979 •••••••••••••••••••••••••••.••.• 39 Diagram 1-1: Total Assets of the Banking Institutions in Israeli and Foreign Currency, Banking System, 1975-1979 •••..•..•..••••.•••••• 40 Diagram 1-2~ Contingent Accounts in Israeli and Foreign Currency, Banking System, 1975-1979 •••••••••••••••••••..•••••.•••..•••••••• 40 Diagram 1-3: Total Assets of Mortgage Banks, 1975-1979 •••••••••••••••. 40 Diagram 1-4: Total Assets of Investment Banks, 1975-1979 •••••••••••••• 40 Diagram 1-5: Consumer Price Index and Exchange Rates of U.S. $ and Deutsche Mark, 1975-1979 •••••••••••••••••••••••••••••.••••••••.•• 41

III CHAPTER II - STRUCTURE OF THE BANKING SYSTEM

Table II-I: Number of Institutions in Banking System, 1975-1979 ••••••• 45 Table 11-2: Number of Offices of Banking Institutions, 1975-1979 •••••• 45 Table II-3: Concentration of the Banking Institutions, as Measured by the H Index, 1975-1979 ....•.....••••.••••••••••..•.••••.•.•.••••. 46 Table 11-4: Development of Banking Offices Abroad, Number of Offices, 1974-1979 •••••••••.••••.•••..•...... ••..•.••.•...•••••••••.••••.. 47 Table 11-5: Offices of the Banking Institutions, by Size, 1975-1979 50 Table 11-6: Indicators as to the Size of Branches of the Banking Institutions, 1979 •••••••••••••••....•.•.•••••••••••.••••••••••.• 52 Table 11-7: Indicators as to Density of Branches of Banking Instituti ons, by Size of Branch, 1979 •.•.•.•.•.•.•.•.•.•.•.•.•.•. 53 Appendix 11-8: Institutional Changes in the Banking System, 1975-1979 54 Appendix 11-9: Commercial Banking Institutions in each of the Banking Groups, 1975-1979 ••••••••.•••••.•.••••••••••••••.•••••••••••.••.. 58 Table 11-10: Floor Area of Bank Branches by Size of Branch, 1979 •••.••• 60

CHAPTER III - SOURCES AND USES OF FREELY LOANABLE FUNDS IN ISRAELI AND FOREIGN CURRENCY

CHAPTER IV - LIQUIDITY IN ISRAELI AND FOREIGN CURRENCY

Table IV-I: Liquid Assets, Exemptions from Liquidity, and Gross Liquidity Surpluses/Deficits, Banking System, 1975-1979 •••.••.•.• 67 Table IV-2: Liquid Assets, Exemptions from Liquidity, and Liquidity Surpluses/Deficits, by Size Groups, 1975-1979 •••••••••••••••••••• 71 Table IV-3: Distribution of Banks by Size of Deficit, 1975-1979 •••..•• 77 Table IV-4: Interest Rates on Liquid Assets in Israeli Currency, and Liquidity Requirements on Deposits of the Public in Israeli Currency, 1975-1980 •••••••••••.••..••••••••••••••.•.•••••.••.••.. 78 Table IV-5: Interest on Liquidity Deficits, 1974-1980 ..••.••.•.••..••• 80 Diagram IV-I: Liquidity Surpluses/Deficits of the Banking Institutions, 1975-1979 •••...•.•••••••.•••..•...••.••••••••••••.••.••.....••••. 81 Diagram IV-2: Ordinary Deposits of the Banking Institutions, 1975-1979 83 Diagram IV-3: Ordinary Credit Liable to Liquidity of the Banking Institutions, 1975-1979 ••.•••..••••...•.•.•••••••.•.•.•••••.•••.• 85

IV CHAPTER V - DEPOSITS IN ISRAELI AND FOREIGN CURRENCY

Table V-1: Deposits in Israeli and Foreign Currency, 1975-1979 ••..••.•• 89 Table V-2: Deposits in Israeli and Foreign Currency, by Quarters, 1978-1979 .•••••••••••.••••...••••••.•.•.•....•..•.••.•.••••••••••. 91 Table V-3: Earmarked Deposits in Israeli Currency, by Quarters, 1978-1979 (without linkage differences) ..•••.•.•••..•••••••••••••. 93 Tabl~ V-4: Deposits in Israeli and Foreign Currency, by Size Groups, 1975-1979 ••••••••••••.••••..••....••••••.••••••••••••••••••••••••• 94 Table V-5: Deposits of the Public in Israeli and Foreign Currency, 1975-1979 •••...•••.•..•..••••••••.••••••.••••••••••.•••...•••••.•• 96 Table V-6: Deposits of the Public in Israeli and Foreign Currency, by Quarters, 1978-1979 ..••••••••••..•.•.••••.••••.••.••.••••.•••.•••• 98 Table V-7: Deposits of the Public in Israeli and Foreign Currency, by Size Groups, 1975-1979 •.•.•...•.•••••••.••••••••••••••••••••.••••• 100 Table V-8: Deposits of the Public in Israeli Currency, 1975-1979 ••••••• 102 Table V-9: Deposits of the Public in Israeli Currency, by Quarters, 1978-1979 •••••••••..•..••..•••.••••••••••••••••••••••••••••••••••• 104 Table V-10: Earmarked Deposits in Israeli Currency, 1975-1979 .•••••••••. 106 Table V-11: Time Deposits, by Period of Deposit, 1975-1979 •••••.••.••••• 107 Table V-12: Time Deposits, by Period of Deposit, by Quarters, 1978-1979 108 Table V-13: Debits to Israel: Currency Demand Deposit Accounts by Size Groups, 1975-1979 .•••••••••••••••••••.•••••.•••••••••••••••••••••. 109 Table V-14: Distribution of Israeli Currency Demand Deposits According to Size of Deposit, 1975-1979 ••.•••••..••••••.••••••••..••••••••••••• 110 Table V-15: Distribution of Israeli Currency Time Deposits According to Size of Deposit, 1975-1979 .•••••••••••••••••••.••••.•••.•••••••••. 112 Table V-16: Distribution of Approved Saving Schemes According to Amount of Savings, 1975-1979 •••••••.••••••••••••••••••••.•••.••..•••••••• 114 Table V-17: Distribution of Public's Foreign Currency Deposits According to Size of Deposit, Banking System •••••••••••.•••.•••••••••••••••• 116 Table V-18: Distribution of Israeli Currency Demand Deposits According to Interest Rates, 1975-1979 .••••••••••••••••••••.••.....•••••••••••• 120 Table V-19: Distribution of Israeli Currency Time Deposits According to Interest Rates, 1975-1979 ..••.•.••.••••••••••••••••••••••••••••••• 121

V Table V-20: Distribution of Negotiable Certificates of Deposit in Israeli Currency, Banking System, 1979 •••••••••••.••••••••••••••• 123 Table V-21: Distribution of Negotiable Certificates of Deposit by Interest Rates, Banking System, 1979 ••••••••••.•••••••••••••••••• 123 Diagram V-I: Deposits of the Public in Israeli and Foreign Currency, 1975-1979 •.•••••••••••••••••••••••••••••••••••••.•.•••••••••••••• 124 Diagram V-2: Deposits of the Public in Israeli Currency, Banking System, 1975-1979 •••••••••••••••••••••••••••••••••••••••••••••••• 124 Diagram V-3: Deposits of the Public in Foreign Currency, Banking System, 1975-1979 •••••••••••••••••••••••••••••••••••••••••••••••• 124

CHAPTER VI - BANK CREDIT, GUARANTEES, AND OTHER CONTINGENT ACCOUNTS

Table VI-I: Credit to the Public in Israeli and Foreign Currency, 1975-1979 ••••••••••••••••••••••••••••••••••••••.••••••.•••••••••• 127 Table VI-2: Credit to the Public in Israeli and Foreign Currency, by Quarters, 1978-1979 •••••••••••••••••••••••••••••••••••••••••••••• 129 Table VI-3: Contingent Accounts in Israeli and Foreign Currency, Banking System, 1975-1979 ••••••••••••••.•.•••.•.•••.••••••••••••• 131 Table VI-4: Credit to the Public in Israeli and Foreign Currency, by Size Groups, 1975-1979 ••••••••••••••••••••••••••••••••••••••••••• 132 Table VI-5: Total Credit Guarantees and Other Guarantees, 1976-1979 134 Table VI-6: Distribution of Ordinary Credit in Israeli Currency, by Interest Rates, 1975-1979 •••••••••••••••••••••••••••••••••••••••• 136 Table VI-7: Distribution of Directed Credit in Israeli Currency, by Interest Rates, 1975-1979 ••••••••••••••••••.••••••••.•••••••••••• 138 Table VI-8: Directed Credit in Israeli Currency and Foreign Currency, 1975-1979 •••••••••••••••••••••••••••••••••••••••••••••••••••••••• 140 Table VI-9: Directed Credit in Israeli Currency and Foreign Currency, by Quarters, 1978-1979 ••••••••••••••••••••••••••••••••••••••••••• 141 Table VI-I0: Directed Credit for Exports in Israeli and Foreign Currency, 1975-1979 •••••••••••••••••••••••••••••••••••••••••••••• 142 Table VI-II: Directed Credit for Exports in Israeli and Foreign Currency, by Quarters, 1978-1979 ••••••••••••••••••••••••••••••••• 143

VI Table VI-12: Directed Credit for Domestic Production in Israeli Currency, 1975-1979 ••••••••••••.•••.••••••••.•••••••••••••••••••• 144 Table VI-13: Directed Credit for Domestic Production in Israeli Currency, by Quarters, 1978-1979 •••.•••••••••• ~...... 145 Table VI-14: Composition and Terms of Directed Credit Funds, 1975-1979 • 146 Table VI-15: Manufacturing Fund for Export, Rates of Financing in IL per Dollar of Export, 1975-1979 •.••••••••••••••••••••••••••••••••.••• 150 Table VI-16: Accounting in Manufacturing-for-Export Fund, 1975-1979 •••• 150 Table VI-17: Distribution of Credit to the Public, by Sectors of the Economy, in Israeli and foreign Currency, Banking System, 1975-1979 ••••••••••..•.••••••••••••••••••••••.••••••••.•••••••••. 152 Table VI-18: Distribution of Ordinary Credit by Sectors of the Economy, in Israeli and Foreign Currency, Banking System, 1975-1979 ••••••• 153 Table VI-19: Distribution of Directed Credit by Sectors of the Economy, in Israeli and Foreign Currency, Banking System, 1975-1979 ••••••• 154 Table VI-20: Distribution of Credit from Earmarked Deposits by Sectors of the Economy, in Israeli and Foreign Currency, Banking System, 1975-:1979 •••••••••••.•••••••••••••••••••••••••••••••••••••••••••• 155 Table VI-21: Distribution of Contingent Accounts of Large Borrowers by Sectors of the Economy, Banking System, 1975-1979 •••••••••••••••• 156 Diagram VI-I: Credit to the Public in Israeli and Foreign Currency, 1975-1979 ••••••••••••••..•••••••••••••••••••••••••••••••••••••••• 157 Diagram VI-2: Credit to the Public in Israeli Currency, Banking System, 1975-1979 ••••••••••••••••••••••••••••••••••••.•.•••••.••••••••••• 157 Diagram VI-3: Credit to the Public in Foreign Currency, Banking System, 1975-1979 •••••••••.•.••.•.••.••.••••••.•••••••••••••••.•••••••••• 157

CHAPTER VII - SECURITY TRANSACTIONS OF THE BANKING INSTITUTIONS

Table VII-I: Investments in Securities According to the Report to the Bank of Israel, 1975-1979 •••••••••••••••••••••••••••••••••••••••• 161 Table VII-2: Investments in Securities According to the Report to the Bank of Israel, by Quarters, 1978-1979 ••••••••••••••.•••••••••••• 163 Table VII-3: Investment Cover for Savings Schemes •••••••••••••••••••••• 165

VII Table VII-4: Investments in Securities According to the Report to the Bank of Israel, by Size Groups, 1975-1979 •••••••••••••••••••••••• 166 Table VII-5: Securities Portfolio at Balance Sheet Value, Groups I + II, 1975-1979 •••.•••••••••••••••••••••••••••••••••••••••••••• 168 Table VII-6: Securities Portfolio at Balance Sheet Value, Groups I and II, 1975-1979 •••••••••••••••••••••••••••••••••••••••••••••••••••• 169 Table VII-7: Securities According to their Marketability, Groups I + II, 1975-1979 ••••••••••••••••••••••••••••••••••••••••••••••••••• 170 Table VII-8: Securities According to their Marketability, Groups I and II, 1975-1979 ••••••••••••••••••••••••••••••••••••••••••••••••••• 172 Table VII-9: Application of Savings Schemes Funds, 1975-1979 ••••••••••• 174 Table VII-10: Bond Issues According to the Type of Purchaser, 1975-1979 ••••••••••.••••••••••••••••••••••••••••••••••••••••••••• 176

CHAPTER VIII - ASSETS AND LIABILITIES IN FOREIGN CURRENCY

Table VIII-I: Assets andcLiabilities of Banking Institutions, in Foreign Currency, Banking System, 1975-1979, (End of Quarter) 178 Table VIII-2: Interbank Deposits and Loans in Foreign Currency, by Countries, Banking System, 1975-1979 ••••••••••••••••••••••••••••• 180 Table VIII-3: Interbank Deposits and Loans (in Israel and Abroad) in Foreign Currency, by Currency, 1975-19~9 ••••••••••••••••••••••••• 182 Table VIII-4: Interbank Foreign Currency Deposits According to the Home Countries of the Banks (Banking Groups), Banking System, 1975-1979 184

CHAPTER IX - CAPITAL IN THE BANKING SYSTEM

Table IX-I: Composition of Capital in the Banking Institutions, Banking System, and Size Groups, 1975-1979 ••••••••••••••••••••••• 189 Table IX-2: Capital in the Major Banking Groups, 1975-1979 ••••••••••• 190

VIII CHAPTER X - REVENUES, EXPENSES AND PROFITABILITY OF THE BANKING INSTITUTIONS

Table X-I: Profitability Indicators of the Banking Institutions, by Size Groups, 1975-1979 ••••••••••••••••••••••••••••••••••.••••••• 197 Table X-2: Income, Expenses and Profits of the Banking Institutions, 1975-1979 ••••••••••••.•.••••••••••••••••.••.•••••••••••••••••••• 200 Table X-3: Financial Assets, Income Earned and Average Return per Asset Category, by Size Groups, 1975-1979 ••••••••.•••••••••••••• 202 Table X-4: Liabilities, Expenses Incurred and Average Expense per Liability Category, by Size Groups, 1975-1979 ••••••••.•••.•••••• 206 Table X-5: Income from Services, by Type of Service, by Size Groups, 1975-1979 ••••••••.•••.•••••••.•••••••••••••••.•••••••••••••••••• 210 Table X-6: Administrative Expenses, by Type of Expense, by Size Groups, 1975-1979 •••••••••••••••••••••••••••••••••••.••••••••••• 212 Table X-7: Added Value of Banking Institutions and Components, by Size Groups, 1975-1979 ••••.•••••••••••••••••••••••••••••••••.••• 213 Table X-8: Distribution of Banking Institutions by Rates of Return on Loans from their Own Resources, 1975-1979 ••••••••••••••••••••••• 214 Table X-9: Distribution of Banking Institutions in Accordance with the Ratio of Pre-Tax Profits to Capital, 1975-1979 ••...••..•.••• 215

CHAPTER XI - MORTGAGE BANKS

Table XI-I: Distribution of Credit Granted by the Mortgage Banks, and End of Year Balances, 1975-1979 ••••••••••••••••••••••••••••••••• 219 Table XI-2: Assets and Liabilities of the Mortgage Banks, 1975-1979 •• 220 Table XI-3: Balances of Credit Granted to the Public by the Mortgage Banks According to Uses, 1975-1979 ••.••••••••••••.•••••.•••••••• 222 Table XI-4: Distribution of Credit Granted by the Mortgage Banks for Residential Purposes, 1975-1979 ••••.•••••••••••••••••••••••••••• 224 Table XI-5: Bond Issues to the Public by the Mortgage Banks, 1975-1979 •••••••••••••••••••••••••••••••••••••••••.••••••••••••• 225 Appendix XI-6: Structure of the Mortgage Banking System, 1979 •••••••• 226

IX CHAPTER XII ~ INDUSTRIAL INVESTMENT BANKS

Table XII-I: Sources and Applications (Cash Basis) of the Industrial Investment Banks, 1976-1979 ••••••••.••..•.•..••••••••• 229 Table XII-2: Asset~ and Liabilities of Industrial Investment Banks, 1975-1979 •••••••••••..•••••••••••...••••••••••••••••••••••••••••• 230 Table XII-3: Income, Expenses and Profit of Industrial Investment Banks, 1976-1979 ••••••••••••••.••••••••••••••••••.••••••••••••••• 232 Table XII-4: Interest Rates on Investment Loans to Industrial Enterprises •••••••••••••.•••••••••••••••..••••••••••••••••••••••• 234

CHAPTER XIII - MISCELLANEOUS

Table XIII-I: Annual Turnover of Current Accounts of the Public in Banks, 1975-1979 •••••••.•••••••••••••••••.••••••••••••••••••••••• 239 Table XIII-2: Money Supply, 1975-1979 •.••••••••••••..•••••••••••••••••• 240 Table XIII-3: Turnover of Clearing Houses, 1975-1979 .•••••••••••••••••• 242

X 1. INTRODUCTION This publication is a statistical appendix to the Examiner of Banks' annual survey on the Israeli banking system. The tables of statistics shown here refer to the various chapters of the survey and are therefore presented in the same order. The statistics are presented in five-year series. We have attempted to show the statistics in maximum detail, so as to enable the user to compile continuous multi-year series. Attention should be paid to the definitions and changes in definitions listed below as well as to the footnotes to the tables. The data bases for these statistics are the periodic reports submitted to the Examiner by the banks, as follows: Monthly Report of Assets & Liabilities, including appendices to this report, Weekly Report on Liquid Assets, Quarterly Report of the Distribution of Credit to Sectors of the Economy, Quarterly Report of Interbank Deposits in Foreign Currency, Quarterly Report of Large Borrowers, Monthly Report of Guarantees, Annual Report of Income and Expenses, Annual Report of Composition of Deposits, Annual Report on Credit analysed by Interest Rate. In addition, usenas been made of the published Annual Financial Reports. Several changes and improvements have been made in this the second issue of this annual publication. However, the procedures for preparation and publication are still evolving and we would welcome any suggestions from the users for improving lay-out or content. In addition to the above the Examiner of Banks publishes, on a regular basis, detailed statistics on assets and liabilities, composition of deposits and distribution of credit in the following publications: A. Statistics of Banking Institutions (monthly) B. Bank Credit According to Sectors of the Economy (quarterly) C. Deposits in Banking Institutions (annually)

2. INSTITUTIONS INCLUDED IN THE DIGEST The tables that follow contain information relating only to the operations in Israel of the banking system. They do not include foreign operations carried out by the banks' various overseas offices such as subsidiaries, branches, agencies, etc. (unless specifically stated othen1ise). At the end-of 1979 the banking system included, for the purposes of this digest, 29 banking institutions fully subject to the Bank of Israel liquidity regulations, 16 mortgage banks, 9 investment banks, and 9 other financial institutions which are ~ot fully subject to the

XI liquidity regulations.l The banking institutions comprise 25 commercial banks, 2 cooperative credit societies, and 2 other institutions. Following is a list of institutions in operation as of the end of 1979:

Banking Institutions A. Commercial Banks 1. 2. Otzar Hahayal Bank 3. American Israel Bank 4. Barclays Discount Bank 5. 6. Israel Building Bank2 7. United Mizrahi Bank 8. 9. Bank "Yahav" Le Ovdei Hamdina3 10. Israel General Bank 11. Le-Israel 12. Trade and Finance Ban~~ 13. Bank Limlacha 14. Trade Bank 15. Bank Massads 16. Mercantile Bank of Israel 17. Ein-Hai Bank6

1 Chapters 1 and 2 refer to the entire banking system, Chapters 3 to 10 refer to the banking institutions, Chapter 11 to the mortgage banks and Chapter 12 to the investment banks. 2 Until 15.2.78 it was a financial institution subject to the liquidity regulations, called "Otzar Hakablanim". 3 Until January 1976 it was a financial institution subject to the liquidity regulations called "Yahav - Kupat Ovdei Hamdina". ~ A new bank to which were transferred on 1.4.79 the banking operations of Swiss-Israel Trade Bank. S Until 1.9.77 it was a cooperative credit society called "Massad Mutual Company for Savi ngs and Loans". 6 Until July 1975 it was a cooperative credit society called "Ein Hai - Cooperative Agricultural Savings and Loans Society".

XII 18. Aliya-Leumi Bank7 19. 20. Bank Polska Kasa Opieki S.A. (P.K.O.) 21. Poalei Agudat Israel Bank8 22. North American Bank9 23. Israel Continental Bank 24. Bapk Kupat Am Le-Israel 25. The First International Bank of Israel

B. Cooperative Credit Societies 1. Savings and Loans Mutual Fund, Petah Tikva 2. Haoved Haleumi Savings and Loans Fund, Netanya C. Other Institutions Fully Subject to the Bank of Israel Liquidity Regulations 1. Maritime Bank of Israel10 2. I.C.F.G. - Industrial Credit and Finance Guarantees

Special Banking Institutions

A. Mortgage Banks 1. Bank "Adanim" Mortgage & Loans 2. General Mortgage Bank 3. Bank Hamoshavim Le-Mashkantaot u-Lehashkaot 4. Bank of Jerusalem for Development and Mortgages 5. Israel Mortgage Bank 6. Carmel Mortgage and Investment Bank 7. Mortgage and Investment Bank for Building 8. Israel Development an~ Mortgage Bank 9. Mortgage and Credit Bank 10. Home Loan Mortgage Bank of Unico 11. Housing Mortgage Bank

7 Until July 1979 a cooperative credit society by the name of "Kupat Aliya". 8 On 2.1.78 the Savings and Loans Fund of P.A.G.I. and Savings and Loans Fund of P.A.G.I., Haifa merged and formed this commercial bank, which is part of the F.I.B.I. group. 9 Until May 1978 this was a financial institution subject to the liquidity regulations called "Otzar Hisachon". 10 From 1978 included for statistical purposes among the banking institutions.

XIII' 12. Independence Mortgage and Development Bank 13. Bank Tel Aviv for Mortgages and Development 14. "Tefahot" Israel Mortgage B~nk 15. Jaysour Mortgage Bank 16. "Merav" Mortgage & Savings Bank

B. INVESTMENT BANKSll

1. Otzar La Taasiya 2. Israel Ampal Industrial Development Bank 3. Israel Bank of Agriculture 4. Yaad Agricultural Development Bank 5. Israel Industrial Bank 6. Industrial Bank 7. Industrial Finance Bank founded by Discount Bank 8. Industrial Development Bank of Israel 9. Industri~l and Aqricultural Promotion Bank founded by Mizrahi Bank

C. Other Financial Institutions

1. Otzar Hashilton Hamkomi 2. "Gahelet" Gmul Hisachon Lehinuch Tichon 3. "Gmul" Investment Companv 4. Bank Leumi Investment Company 5. "Hesech" Kupat Hisachon Lehinuch Tichon. Haifa 6. Kaspia Finance Company 7. "Mimunim" Finance Company of Bank Leumi 8. "Margal it" Mifalei Ramat Gan Lehinuch Tichon 9. "Idud"

11 For statistical purposes the Israel Bank of Agriculture is listed as an investment bank even though it is subject to the liquidity regulations. "Industrial Investment Banks" - investment banks listed here. with the exception of the Israel Bank of Agriculture and Yaad Agricultural Development Bank.

XIV 3. DIVISION OF BANKING INSTITUTIONS ACCORDING TO SIZE

The banking institutions included in this digest are divided into four size groups, by reference to the average for 1978 of total deposits of the public (in Israeli and foreign currency) held in each bank's Israeli offices. The parameters for each group in terms of deposits vary from year to year; those shown below were those applicable in 1979. Deposits of the public for the purposes of this classification are: demand and time deposits, other deposits and creditors, drafts payable, deposits in foreign currency, approved savings schemes and demand and time deposits of mortgage banks and investment banks at banking institutions. The institutions within each group are arranged according to the Hebrew alphabet.

GROUP I: Deposits of the public over IL20,000 million 1. Israel Discount Bank 2. Bank Hapoalim 3. Bank Leumi Le-Israel GROUP II: Deposits of the public IL4,000 million - IL20,000 million

1. Union Bank of Israel 2. Barclays Discount Bank 3. United Mizrahi Bank 4. First International Bank of Israel

GROUP III: Deposits of the public IL500 million - IL4,000 million

1. American Israel Bank 2. Maritime Bank of Israel 3. Israel General Bank ~ Aliya-Leumi Bank

GROUP IV: Deposits of the public under IL500 million

1. Otzar Hahayal Bank 2. Israel Building Bank 3. Bank "Yahav" Leovdei Hamdina 4. Trade and Finance Bank 5. Bank Limlacha 6. Trade Bank 7. Bank Massad

XV 8. Mercantile Bank of Israel 9. Ein-Hai Bank 10. Arab Israel Bank 11. Bank Polska Kasa Opieki S.A. (P.K.O.) 12. Poalei Agudat Israel Bank 13. North American Bank 14. Israel Continental Bank 15. Bank Kupat-Am Le-Israel 16. I.C.F.G. - Industrial Credit and Finance Guarantees 17. Savings and Loans Mutual Fund, Petah Tikva 18. Haoved Haleumi Savings and Loans Fund, Netanya 4. SOURCE OF STATISTICAL DATA

Balance sheet data appearing in this digest come from the Monthly Reports of Assets and Liabilities submitted by the Banks to the Examiner. The figures are presented as annual or quarterly averages or on an end-of-month basis as specified in the tables. In a number of tables, the data sources are the published Annual Financial Reports. The data on distribution of credit and on interbank deposits in foreign currency are based on quarterly reports, while data on composition of deposits, 'on income and expenses, and on credit analysed by interest rate are based on annual year end reports. Data on guarantees are taken from the Monthly Reports on Guarantees and other contingent liabilities. Data on concentration of credit to large borrowers are based on periodic reports on large borrowers. Until 30.6.77 the banks reported on borrowers whose obligations to the reporting bank exceeded IL100,00012 or IL250,000 (reported at the end of March and September), or exceeded IL500,000 (reported at the end of June and December). Until the aforementioned date the banking institutions reported on a quarterly basis, while the special ~anking institutions (mortgage banks, investment banks, and other financial institutions) reported twice a year (at the end of June and December). As of 30.9.77 all institutions are obliged to report quarterly, although the minimum amount of anyone borrower's obligations13 requiring a report varies by reference to the size of the

i2 Only small cooperative credit societies were required to report at this level. 13 The term "obligations" in this context means credit from earmarked deposits, ordinary credit, directed credit and contingent accounts in Israeli and foreign currency.

XVI reporting institution's capital base. The reporting basis is now uniform for each quarter, and until 31.12.78 was as follows:

A banking institution whose capital is: reports on customers whose bbligations exceed: up to ILI0 million IL250,OOO between ILI0 million and ILI00 million IL500,OOO over ILI00 million IL750,OOO From 31.3.79 the above parameters were changed and they are now as follows: A banking institution whose capital is: repo~ts on customers whose obligations exceed: up to IL50 million IL500,OOO between IL50 million and IL300 million ILl,OOO,OOO over IL300 million ILl,500,OOO

5. DEFINITIONS Banking Institution Commercial Bank or Cooperative Credit Society which receives deposits for current accounts for the purpose of making payments by check; or an investment bank or financial institution fully subject to the liquidity regulations (does not include Mortgage Banks and Investment Banks which are not fully subject to the liquidity regulations). Special Banking Institution - mortgage bank, investment bank or financial institution not fully subject to the liquidity regulations. Mortgage Bank - a company whose principal activity is the granting of loans to home buyers and for building purposes, and which has been classified as a mortgage bank by the Examiner of Banks. Investment Bank - banking or financial institution whose principal activity is the granting of medium and long term credit, excluding mortgage banks. Other Financial Institution - an institution which is obliged to file reports with the Examiner of Banks, and which is not fully subject to the liquidity regulations. Administered Territories - Judea, Samaria, Golan Heights, Gaza Strip and Sinai. Office - head office, ordinary branch, restricted branch or exchange counter, including banking offices in the territories, but excluding overseas branches. Branch - a place in which a bank or cooperative society conducts business with the public. XVII Restricted branch - a branch with is restricted to specific transactions or specific days of operation. Exchange counter - a branch whose transactions are limited to foreign currency, mainly in hotels or at fairs and convention centers, and deals mostly with currency exchange and not with receipt of deposits. Branch extension - a place in which one or more specified sections of a branch operate; its activities are controlled by the branch manager and it is considered part of the branch. The location must be in such proximity to the branch so that the two can be considered as one. Employees - branch staff, central management staff, maintenance staff, and computer staff. Population - present population, as define. in the Statistical Abstract of Israel, published by the Central Bureau of Statistics. Not including the population of the territories. Public - individuals, firms and companies; including investment banks, mortgage banks, and financial institutions exempt from liquidity requirements. Does not include the government and institutions subject to liquidity requirements. Foreign resident - an individual who is not a citizen of Israel and who if in Israel is in possession of a transit or tourist visa, and a corporation that is neither registered nor incorporated in Israel, excluding banks. Israeli resident - a person who is.not a foreign resident, excluding banking institutions and foreign banks. L1quid Assets in Israeli Currency - deposits with the Bank of Israel that are recognized as liquid assets, banknotes and Treasury bills. Liquid Assets in Foreign Currency - deposits with the Bank of Israel against non-resident accounts, resident accounts, restitutions accounts and resident accounts in connection with loans from abroad as well as cash against deposits in Jordanian dinars. Deposits with banking institutions - deposits with and loans to banking institutions in Israel. Deposits with and loans to foreign banks (including branches and banking subsidiaries of the reporting bank and of other Israeli banks) and negotiable certificates of deposit of foreign banks.

XVIII Negotiable Certificates of Deposit - negotiable certificates of deposit purchased either by the issuing banking institution or by other banking institutions, including loans to a wholly-owned subsidiary of the issuer, whose sole activity consists of trading in that institution's certificates. Credit to the public in Israeli currency - ordinary credit, directed credit and credit from earmarked deposits. (for details see below). Ordinary credit - does not include the bank's participation with its own funds in directed credit or in credit granted from earmarked deposits. Directed credit - credit within the framework of the funds, non-fund credit against rediscounting, non-fund credit against liquidity exemptions and authorised credit from approved savings schemes funds. Credit granted from Earmarked Deposits - credit granted from earmarked deposits, including participations by banking institutions from their own funds. Overdraft accounts - debit balances on current accounts. Credit in foreign currency to Israeli residents (the public) - ordinary credit, directed credit and credit from earmarked deposits (for details see below). Ordinary credit - credit to Israeli residents and to mortgage and investment banks, excluding directed credit and credit from earmarked deposits. Directed credit - credit against rediscounting from the Bank of Israel within the framework of the export funds in foreign currency, and credit against rediscounting in foreign currency not within the framework of the funds. Credit from earmarked deposits - credit from approved earmarked deposits to Israeli residents and to mortgage and investment banks. Credit in foreign currency to foreign residents - ordinary credit and credit-from earmarked deposits to foreign residents. Credit to the-government - credit to the Israeli government from earmarked deposits and from the banks own funds. Bonds in Israeli currency - Government loans (including short-term loans), and bonds of subsidiaries and of other companies and institutions.

XIX Shares in Israeli currency - investments in shares (at cost) of subsidiary and other companies. Foreign currency securities - bonds and shares of companies and other institutions in Israel and abroad, issued in foreign currency. Bank premises and equipment - bank premises, equipment, land and other buildings. Contingent accounts - Customer's liabilities for acceptances, documentary credits for imports and exports, credit guarantees, and other guarantees. Other accounts (assets) - expenses less income of the current year, other accounts and amounts in transit.

Equity capital - paid-up capital, reserves, surpluses and share applications. Subordinated capital notes - subordinated convertible capital notes and subordinated non-convertible capital notes. Bonds and other notes - unsubordinated capital notes. Deposits from banking institutions - deposits and loans from banking institutions in Israel and deposits and loans from foreign banks (including branches and banking subsidiaries of the reporting bank and of other Israeli banks). Total deposits in Israeli currency - deposits of the public, deposits of the government, approved earmarked deposits, and deposits from banking institutions. Deposits of the public in Israeli currency - ordinary deposits, time deposits, approved savings, linked long-term deposits and negotiable certificates of deposit (for details see below). Ordinary deposits - demand deposits (checking and non-checking accounts), drafts payable and other deposits and creditors subject to liquidity. Time deposits - time deposits of two months and over. Approved Savings - savings schemes deposits as approved under the Law for the Encouragement of Savings. Linked long-term deposits - deposits of IL500,OOO and over for an average period of at least 2~ years, linked to the consumer prices index. Negotiable certificates of deposit - unlinked time deposit in Israeli currency of IL500,OOO or more, against which the bank has issued a negotiable certificate. Approved earmarked deposits in Israeli currency - earmarked deposits from related companies (proceeds of new issues), from provident funds, from the Jewish Agency, from mortgage banks, from investment banks and from others, approved for the purposes of the liquidity regulations.

xx Deposits of the public in foreign currency - restitutions deposits, resident deposits and non-resident deposits (for details see below). Restitutions deposits - deposits in accordance with section 6 of the Foreign Currency General Permit. Resident deposits - includes resident deposits in connection with loans from abroad, deposits in Jordanian dinars and ordinary foreign currency deposits of mortgage banks and investment banks. Non-resident deposits - non-resident deposits of foreign residents, shipping and airline companies, exporters and other Israeli residents who are permitted to hold non-resident accounts and amounts not yet classified. Earmarked deposits - foreign currency earmarked deposits of the public, the Jewish Agency, mortgage banks and investment banks. Government deposits - deposits of the Israeli government in connection with loans to taxpayers, participation in directed credit funds and others. Loans from the Bank of Israel - loans and bills discounted both within and aside from the directed credit funds and other loans and rediscounting. Other accounts (liabilities) - current year income less ~xpenses, other accounts and amounts in transit. Total guarantees and other liabilities on behalf of customers (gross) - Liabilities on behalf of customers on which limits are imposed by the Guarantees Regulations, before the permitted deductions. The regulations impose two separate limitations - a general limit on the amount of all liabilities on behalf of customers and a specific limit on the amount of credit guarantees. Permitted deductions - Transactions to which no real risk attaches are deducted from the above liabilities, such as pledge of cash deposits or counter guarantee fr9m the Government, Jewish Agency or Israeli banking or financial institution. Weighted guarantees and other liabilities - The guarantees are weighted by reference to the level of risk, for the purpose of determining the actual exposure, as follows: Credit guarantees 100% Performance guarantees 33% Guarantees for home buyers' down payments 33%

XXI Documentary credits 20% Formal guarantees 10% Other liabilities not listed above 50% Permitted limit - Credit guarantees - 150% of the bank's capital. Total guarantees and other liabilities - 300% of the bank's capital. Surplus or deficit - Difference between actual exposure based on the above weighting and the permitted limit. Israeli currency deposits subject to liquidity - ordinary deposits, time deposits, negotiable certificates of deposit and unutilised balances of earmarked deposits from the government, the Jewish Agency and other institutions. (Liquidity in the form of authorised investments in securities is permitted in connection with approved savings schemes and linked long-term deposits). Total liquidity required in Israeli currency (gross) - calculated by reference to the liquidity required on deposits, on ordinary credit, on surplus participation by the Bank of Israel and the government in directed credit funds and on under investment in authorised securities as cover for savings schemes, but before any deduction for liquidity exemptions on directed credit and on exempt deficits. Total liquidity required in Israeli currency (net) - as above, after deducting liquidity exemptions on directed credit and on exempt deficits. Debits to demand deposit accounts - total amount of debits to demand deposit accounts in Israeli currency during the month. Debits to overdraft accounts - total amount of debits to current accounts for which overdraft arrangements have been determined in advance. Annual turnover rate on demand deposit accounts is defined as: debits to demand deposit accounts business days in year x demand deposit accounts* business days in month

* average balance of demand deposit accounts at end of current month and at end of previous month. Money supply - currency in circulation and demand deposits of the public with banking institutions.

XXII 6. RECLASSIFICATION OF REPORTED ITEMS The list below contains notifications received from the banks concerning reclassification of various assets and liabilities as a result of corrections to errors made in the original reports. The statistics have been corrected from the data of the reported change, but no retroactive corrections have been made.

Amount Date (IL mi 11ion) Change

December 1974 2,000 Until November 1974 linkage differences on investments in securities were included in "Other accounts"; thereafter they are included in "Investments in bonds". 2,500 Until November 1974 as above; thereafter included in "Savings". January 1976 1,100 Transferred from "Deposits in foreign banks" to "Credit to forei gn res idents" (forei gn currency) • February 1976 400 Transferred from "Deposits from foreign banks" to "Foreign currency deposits from the public". May 1976 530 Transferred from "Credit to the government from the bank's own resources" to "Israel government bonds" (Israe 1i currency).

Date Amount (IL mi 11ion) Change

September 1976 650 Transferred from "Credit to the government from the bank's own resources" to "Ordinary credit" (Israeli currency). January 1977 128 Transferred from "Ordinary credit" to "Directed credit" (Israeli currency). September 1977 550 Transferred from "Credit to foreign residents" to "Credit to Israeli residents" (foreign currency) . October 1977 3,700 Transferred from "Credit to the government from earmarked deposits" to "Credit to the government from the bank's own resources" (foreign currency).

XXII I November 1977 125 Transferred from "Ordinary credit to the public" to "Credit from earmarked deposits" (foreign currency). November 1977 1,929 Transferred from "Ordinary credit to Israeli residents" to "Ordinary credit to foreign residents" (foreign currency).

December 1977 2,127 Transferred from "Credit to the govetnment from

the bank I s own resources" to "Credit to the government from earmarked deposits" (foreign currency) •

December 1977 1,800 Transferred from "Credit from earmarked deposits to foreign residents" to "Credit from earmarked deposits to Israel ires idents" (forei gn currency).

January 1978 998 Transferred from "Foreign residents deposits" to "Israeli residents non-resident deposits", being deposits of new immigrants and temporary residents. January 1978 323 Transferred from "Approved earmarked deposits from banks abroad" to "Time deposits from banks abroad". January 1978 1,500 Transferred from "Acceptance in foreign currency" to "Credit to Israeli residents" (assets) and "Deposits from banks abroad" (liabilities). September 1978 330 Transferred from "Credit to foreign residents" to "Credit to Israel i residents in foreign currency" . April 1979 1,200 Transferred from "Credit to Israeli residents" to "Credit to foreign residents", being credit to Israeli-owned foreign corporations. This digest is published by the Statistical Reporting Division at the office of the Examiner of Banks. The digest is produced by the Publications Division of the Bank of Israel. All calculations based on reported data were carried out by the Computer Services Division of the Bank of Israel.

XXIV