Bank Leumi CEO in Talks to Take Pepper Mobile Bank Global

(Bloomberg) -- ​After aggressive digitalization and cost-cutting programs helped turned around ​Bank Leumi Le-Israel Ltd.​, Chief Executive Officer ​Rakefet ​Russak-Aminoach​ is preparing an international expansion of its mobile bank.

"We are looking at going global; we are checking some business plays and considering some partnerships with others" including technology companies and larger banks, she ​said in an interview on the sidelines of the World Economic Forum in Davos, Switzerland. Leumi is targeting the bigger markets of the U.S. and Europe, she said, while declining to name any of the companies she’s in discussions with.

Bank Leumi CEO in Talks to Take Pepper Mobile Bank Global

The 51-year-old CEO added that at Bank Leumi she plans to continue cutting costs at the same rate as in previous years, after reducing expenses by roughly 25 percent in the four years ending in 2016 to 10.5 billion shekels ($3.1 billion).

"Cost reductions will continue and continue and continue," she said. "The streamlining process is never ending; we have 3,000 fewer people now than when we started and I don’t see the bottom" of efforts to reduce expenses, she said.

Pepper Business

With near-zero interest rates keeping a lid on revenue growth, Russak-Aminoach has focused on improving efficiency, freeing up cash to reinstate its dividend and boosting Leumi’s stock to a record. The lender’s shares rose 0.5 percent to 21.36 shekels as of 11:05 a.m. in Tel Aviv, close to the all-time high of 21.74 shekels reached on Jan. 7.

The hallmark of Russak-Aminoach’s strategy has been investing in technology, the largest project of which is Leumi’s mobile-banking business called Pepper. 

Launched in June, Pepper is building up a client base at a speed that caught the company off guard, resulting in a bottleneck at the application stage. Russak-Aminoach said she’s confident she’s close to an agreement with the regulator to ease the registration process.

Russak-Aminoach, who has been linked to jobs at major European banks, said she had been approached but the talks went nowhere. She plans to stay at Leumi for another two years to complete the digitalization of the traditional side of the bank’s back-office systems.

"I don’t want to stay here another five-and-a-half years and I won’t go to be the CEO of another traditional large bank," she said. After a recent trip to Berlin to see the city’s startup scene, she said she might consider running a pure fintech firm.

©2018 Bloomberg L.P.

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