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By Steven Scheer
JERUSALEM, March 10 (Reuters) – Bank Hapoalim said on Sunday it plans to list shares of its credit card unit Isracard on the Tel Aviv Stock Exchange following demands by regulators for banks to divest their credit card subsidiaries.
Hapoalim said in a statement it would hold a road show with investors in coming weeks, with a subsequent offering dependent on demand.
The unit is valued at 3 billion shekels but could fetch a higher amount, sources said, and the listing could be one of the largest ever on the Tel Aviv bourse.
A prospectus said the sale would be for about 50 percent of Isracard’s shares, although market sources estimated a range of 30 to 70 percent. A single investor would need to own at least 30 percent to receive a control permit from the Bank of Israel.
Hapoalim CEO Arik Pinto said the credit card market in Israel had been growing steadily in recent years and at high levels relative to overall economic activity.
Hapoalim and chief rival Leumi were given a 2020 deadline to divest their credit card subsidiaries under a new regulation designed to increase competition by prohibiting Israel’s two top banks from owning credit card firms.
Last month, U.S. private equity firm Warburg Pincus completed its acquisition of Leumi’s credit card business. .
In preparation for the offering, Isracard’s board declared a dividend of 867 million shekels ($239 million), of which 851 million will go to Hapoalim, according to a regulatory filing.
Isracard is Israel’s largest credit card issuer, with an annual turnover of 155 billion shekels, representing 45 percent of credit card transactions. It has 3 million customers and has issued five million credit cards.
In 2018, net profit rose 6 percent to 318 million shekels, while its consumer credit portfolio grew more than 24 percent to 3 billion shekels.
Following the offering, Hapoalim could sell its remaining stake to an investor, hold another public offering or distribute the shares as a dividend, it said.
Shares of Hapoalim were down 0.9 percent in afternoon trading in Tel Aviv.
$1 = 3.6288 shekels
Additional reporting by Tova Cohen
Editing by Elaine Hardcastle and Kirsten Donovan