How concentrated is Israeli banking?

Five banks control approximately 98% of Israeli banking sector assets — one of the most concentrated banking markets among developed economies. The top two banks, Hapoalim and Leumi, hold roughly 48% of all banking assets and over 50% of public deposits.

What did the Israel Competition Authority declare about the banks in 2026?

On May 6, 2026, the Israel Competition Authority declared the top five Israeli banks a 'concentration group' — the legal status that authorizes targeted directives. Directives take effect May 6, 2027 and cover deposit pricing, customer-switching friction, and standalone product access.

Did the Bank of Israel support the concentration group declaration?

No. The Bank of Israel publicly opposed the declaration as 'extreme and disproportionate,' arguing its existing prudential reforms already addressed competitive concerns. The split between the two regulators was the most visible inter-regulator conflict in Israeli finance in recent memory.

How profitable were Israeli banks in 2024?

The five major Israeli banks generated combined net profit of NIS 29.5 billion (approximately $7.8 billion) in 2024 — a record year, with both Leumi and Hapoalim posting all-time individual earnings records.

The Banking Oligopoly

Five banks control approximately 98% of Israeli banking sector assets. The top two — Hapoalim and Leumi — hold roughly 48% of all assets and just over 50% of public deposits. The five together generated NIS 29.5 billion (~$7.8 billion) in combined net profit in 2024 — a record year. On May 6, 2026, the Israel Competition Authority formally declared the top five banks a concentration group. The Bank of Israel publicly opposed the move as "extreme and disproportionate" — the defining Israeli financial-regulation conflict of 2026.

The Concentration

The five banks — Bank Hapoalim, Bank Leumi, Israel Discount Bank, Mizrahi Tefahot Bank, and First International Bank of Israel — control approximately 98% of Israel's ~NIS 3 trillion in banking sector assets. The US top five hold roughly 45% of US banking assets. The UK top five roughly 70%. Israel is among the most concentrated banking markets among developed economies. In the mortgage market, three banks issue roughly 81% of all Israeli mortgages. Full context: The Five-Bank Market After Strum and The Shekel Mortgage Book as Macro Indicator.

The 2024 Profit Cycle

The most profitable year in modern Israeli banking history. Combined net profit: NIS 29.5 billion. Both Leumi and Hapoalim posted all-time individual records. The profits were driven by the rate environment — the BOI's 2023–2024 tightening cycle raised lending rates while deposit rates lagged. The BOI introduced a relief scheme requiring NIS 3 billion in consumer relief by 2027 — a partial response that did not address the structural conditions.

The May 6, 2026 Declaration

Israel Competition Authority Director-General Michal Cohen formally declared the top five banks a concentration group. Directives take effect May 6, 2027. Three conditions: deposit price discrimination is prohibited; customer-switching friction must be eliminated (banks must proactively contact customers near deposit renewal, enable online transfers); standalone product access must be offered without forcing customers to maintain a current account.

The Bank of Israel Dissent

The Bank of Israel described the declaration as extreme and disproportionate and argued its own prudential reforms already addressed the competitive concerns. The split — both regulators agree on the diagnosis, disagree on the tool — is the most visible Israeli inter-regulator conflict in recent memory.

The Neema Fine — April 2025

Hapoalim and Discount were each fined NIS 40 million for minority holdings in fintech startup Neema — a marker that incumbent bank equity in fintech startups would be treated as competition-restricting going forward. Context: Bit, PayBox and the Battle for Israeli Consumer Payments.