Israel's Bank Leumi Eyes Return to Diamonds

RAPAPORT... Israel's Bank Leumi has entered the bidding to acquire Union Bank's diamond-lending business, signaling a potential return to the industry following a six-year absence.The move pits the lender against Peninsula, another Israeli credit provider, which announced last week it was in advanced talks to buy the portfolio. "We submitted an offer to purchase [Union Bank's] portfolio," a Bank Leumi spokesperson told Rapaport News in an email Wednesday. The loans are up for sale as part of Union Bank's merger with rival Mizrahi Tefahot. The Israel Competition Authority ruled in January that one of the sides must sell its diamond portfolio to a third party because so few lenders were involved in the sector. Union Bank's outstanding loans to the industry amount to $100 million, while its clients' credit limits total $245 million, according to Peninsula's June 4 statement.Leumi, once the largest lender to the Israeli diamond industry, closed the business in 2014. That preempted a wave of banks leaving the diamond trade, including the Antwerp Diamond Bank and London-headquartered Standard Chartered Bank. First International Bank of Israel tightened its lending terms for diamantaires in 2016, while Dutch bank ABN Amro and India's ICICI Bank have reduced their exposure to the sector.Union Bank was unavailable for comment at press time.Image: A Bank Leumi branch in Beersheba, Israel. (Shutterstock)