Israel’s Lender Leumi Is Said to Weigh Sale of U.S. Bank Arm

Bank Leumi Le-Israel BM, one of Israel’s largest lenders, is considering a sale of its U.S. bank arm, which could fetch about $1 billion, according to people familiar with the matter.

The Tel Aviv-based bank is working with a financial adviser to find buyers for Bank Leumi USA, said the people, who declined to be identified because the matter isn’t public. It also may consider an initial public offering for the unit, one of the people said.

The plans are at an early stage and Bank Leumi may opt to hold onto the business, they said.

The company regularly reviews options for Bank Leumi USA as part of an investment agreement with two minority shareholders in the unit, one of the people said. Those shareholders are Endicott Management Co. and MSD Capital LP, which Bank Leumi USA’s holding company sold a 15% stake to in 2018. MSD Capital manages Michael Dell’s personal fortune.

Leumi hasn’t taken any decision to carry out a transaction, the bank said on Wednesday in a regulatory filing to the Tel Aviv Stock Exchange, in response to the report.

The potential sale comes as U.S. bank consolidation accelerates, spurring some foreign-owned banks to consider parting with their stateside operations. HSBC Holdings Plc is in the midst of considering strategic options for its U.S. retail business while Banco Bilbao Vizcaya Argentaria SA agreed last year to sell its U.S. arm to PNC Financial Services Group Inc.

Bank Leumi USA had five branches, $7.2 billion in assets and about $6 billion of deposits as of Dec. 31, according to the Federal Deposit Insurance Corp.

Bank Leumi shares rose as much as 1.1% in Tel Aviv trading on Wednesday.

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