First Int’l Bank in confrontation with middle managers

Labor relations at the top of First International Bank of Israel, headed by Eli Cohen and controlled by Zadik Bino, are on the point of breakdown. Sources inform “Globes” that nearly sixty middle managers and bank officers are expected to take early retirement from the bank between the end of this month and the end of the year. The departures are being directly encouraged by Cohen and the bank’s senior management, which intends to institute a broader move: the voluntary retirement of another 15% of the bank’s middle management.

This is part of a wider trend in the banking industry, in which the large banks are gradually paring down their workforces, despite their huge profits and unending dividends.

First International Bank has a market cap of NIS 23 billion. Its share price has dropped by a little over 5% since the beginning of the year. In the past few years, the performance of the bank’s stock has lagged behind those of the other major banks. In the past three years it has risen by 67%, while Discount Bank has risen 77%, Mizrahi Tefahot Bank has risen 85%, Bank Hapoalim has risen 148%, and Bank Leumi has risen 170%.

It could however be that the tepid performance of its stock stems from the fact that First International Bank has a high price-to-book ratio. This ratio, of a bank’s market cap to its shareholders’ equity, is a widely used measure of its strength and business performance, and in the past few years First International Bank has had the highest price-to-book ratio among the major banks. It currently stands at 1.61, second to Mizrahi Tefahot Bank on 1.68, and higher than those of Discount Bank (1.14), Bank Hapoalim (1.46), and Bank Leumi (1.54).

First International Bank’s efficiency ratio (non-interest expenses divided by revenue – the lower the figure the better) was 49.4% in the first quarter of this year and 46.1% for 2025, making it one of the weakest of the big five banks in this respect. This has presumably led to the pressure from senior management to become more efficient and to the formulation of the plan for early retirement for middle managers. These managers are organized in a union headed by Dikla Kritz that currently numbers about 650 members. The bank’s management, seeking to reduce costs in every way possible and to weaken the managers’ union, has developed a method of circumventing it by offering workers who are members of the clerks union (which has over 1,500 members and is the largest union at the bank) appointments as “clerks with authority”, that is, quasi managers. A few dozen such “clerks with authority” have moved into managerial roles. The bank thus saves managerial salaries and circumvents traditional collective agreements, which could put it on a collision course with the Histadrut (General Federation of Labor in Israel).

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The unrest in labor relations at First International Bank also extends to the union at its technology unit MATAF – Computing & Financial Operations Ltd. There, the union began sanctions this week after negotiations on a new collective labor agreement broke down.

Being pushed to leave

A source at the bank told “Globes” about summonses to meetings at which middle managers are informed of the intention to move them to different jobs, sometimes far away. The source said he saw this as intended to push him into early retirement, without the required hearing, as it would be as though he had initiated the step.

Managers at the bank report work overload and harm to service brought about by, among other things, job cutbacks. Managers at First International Bank find themselves carrying out the work of clerks, but do not wish to be perceived as such. The manager of a large branch found himself answering telephone calls “like a beginner telemarketing rep”, and anonymously, so that customers would not know that they were speaking to the manager and not to a junior employee.

Bonuses to top management

In the first quarter of this year, First International Bank posted a return on equity of 13.2% and a net profit of NIS 480 million. The bank has shareholders’ equity of NIS 14.5 billion. Its customers’ assets grew by 25% in the first quarter to NIS 1.2 trillion. First International is the leading bank in the capital market.

Because of the strong results in 2024 and 2025, the salary ceiling for members of senior management was raised substantially with the approval of the shareholders. The maximum bonus for senior managers was increased by over NIS 1.1 million, and those managers received a bonus of five salaries for 2025 – four in cash and one in the form of stock-based compensation. The bank’s senior management refused to conduct negotiations with the managers’ union on bonuses for 2024 and 2025, contrary to normal practice in the banking system. Middle managers were paid very low bonuses, but the figures were not shared with the union.

Not just at First International

At Bank Hapoalim, a labor dispute has been running for almost a year, after being declared last September. In May, there was a one-day strike at the bank on the eve of the release of the first quarter results. The bank is promoting a voluntary retirement program under which 770 employees will leave by the end of 2028, at a cost of NIS 600 million. The employees’ union, headed by Roni Garfunkel, has been conducting a prolonged campaign against the management, headed by CEO Yadin Antebi.

In February, the union together with the Histadrut petitioned the Tel Aviv Regional Labor Court claiming that the management was forcing quotas on managers to mark down 5% of the employees as needing to improve their performance. So far as is known, no understandings have been reached at Bank Hapoalim.

Relations are tense at the Discount group as well. Last week, Discount Bank announced that its board of directors had authorized the management, headed by CEO Avi Levi, to examine the possibility of merging the group’s Mercantile Bank unit into Discount Bank. In response, the chairperson of Mercantile Bank’s employees’ union, Adv. Alex Greenspan, wrote to Levi and Discount Bank chairperson Danny Yamin saying that he had received the reports “with astonishment, anger, and disgust,” and that the union would work with the Histadrut to declare a labor dispute.

Responses

First International Bank stated in response: “The management is conducting itself in a considered fashion, out of concern for the employees, while the average salary cost in the First International group is one of the highest in the banking system.”

On the retirement program for middle managers the banks says, “The program is still open and we do not yet have final numbers. This is a voluntary retirement program with very good terms that is being extensively taken up.”

The bank also said that it was not aware of the claim about a manager forced to answer the telephone like a junior employee. “All the employees, managers and clerks, speak to customers and provide them with service,” it said.

Concerning MATF, the bank said, “The Histadrut did not approve the measures requested by the workers’ union. We are conducting negotiations with the union in cooperation with the Histadrut and we take a grave view of the fact that although the negotiations have not been exhausted the union chooses to threaten steps that are liable to damage the bank and that have not been approved by the Histadrut (which is a party to the negotiations) as required.”

The First International Bank Managers’ Union stated, “Negotiations are currently taking place between the union and the bank’s management with the participation of representatives of the Histadrut, following unilateral steps taken by the management that harm the managers’ rights.

“The management refuses to hand over to the union material data required for businesslike negotiations, to cure significant breaches of the collective agreements, and to sign an agreement concerning the retirement plan and its consequences. If the issues are not settled within a short time, we will consider a petition to the Labor Court with the aim of preserving the rights of the members of the Managers’ Union.”

Published by Globes, Israel business news – en.globes.co.il – on July 22, 2026.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.