Discount Bank mulls Mercantile merger

Israel Discount Bank (TASE: DSCT) board of directors has decided to examine the merger of its subsidiary Mercantile Discount Bank into it. The aim of the change in structure, if approved, according to the bank, is to strengthen the group’s competitiveness. The move will adapt the group’s activity structure to the business, technological and operational challenges of the banking system, improve operational efficiency and flexibility and enable optimal allocation of resources and investments, while creating value for all stakeholders.

Mercantile Discount Bank, led by CEO Barak Nardi, has branches focused on the Arab sector and the haredi community. The bank also concentrates activities on small and medium-sized businesses. The merger into Discount would reduce many duplicate roles and costs for the group.

In April, “Globes” reported that a critical letter sent by Discount Bank CEO Avi Levi was a possible preliminary step towards a merger of Mercantile with the bank. Discount Bank then rejected the claims and said that a merger was not on the agenda. However, in practice the plan has moved forward.

Discount Bank’s board of directors said today, “The review will be conducted with the intention of preserving the Mercantile brand and the areas of activity in which Mercantile has expertise and a strategic advantage. The examination will also focus on the possibility of combining the strengths of the two banks, with the aim that the connection to Discount will allow Mercantile to expand its activities and offer customers a stronger combination of Mercantile’s specialization and Discount’s range of products, technologies and infrastructures.”

Bank shares have lost the momentum of recent years in recent months, as the trend of interest rate cuts by the Bank of Israel has been implemented. Shares of four of the five largest banks – Hapoalim, Mizrahi Tefahot, Discount and First International fell about 11% in the past quarter, while Leumi’s share fell a slightly more moderate 7%. Last year, Discount’s stock fell 6%, which is still the sharpest decline among the shares of the five largest banks. The bank currently has a market cap of NIS 38 billion.

Discount owns a real investment arm called Discount Capital, which has extensive underwriting activity. The Group also owns 85% of the shares of Discount New York, Bank Hapoel in the US, through which the group’s international activities are carried out, as well as holdings in the payment application Paybox. The bank is currently awaiting the decision of the Competition Commissioner on the sale of its 72% stake in credit card company ICC-CAL to the Union Group of the Horesh family and Harel.

Published by Globes, Israel business news – en.globes.co.il – on July 13, 2026.

Source link