Discount Bank will guarantee IAI deal with State of India for $600 Million. CRS led this deal by reinsuring $480 Million, with AA Reinsurers.

The Bank’s guarantee will be the main part of the agreement – the sale of Barak’s missile systems for $ 1.6 billion. Bank Discount was the only bank that managed to place the guarantee within two weeks, reinsured 80% of the guarantee and thereby reduced its exposure to $120 million.

Calcalist has been informed that the bank’s exposure to international AA reinsurers has been made possible through Capital Relief Solutions (CRS). Owners, Esti Friedman and Itzik Klein approached the reinsures to (Re)insure 80% of the guarantees.

Reinsuring the Housing Bonds Portfolios of Israeli banks with Global Reinsurers, led by CRS, released Real Estate financing pressure.

A few months ago, Dr. Hedva Ber, the Director of Banks, decided that this would enable a relief for the banks and allow an increase to their credit. Moreover, the Bank of Israel estimated that this relief in return would increment the value of real estate credit by 10 billion NIS.

Just this past year and half, the majority of the banks acquired insurance from reinsurers to protect credit in the Sales Law Guarantees portfolio which is estimated at 70 billion NIS.

Yes to capital adequacy in Israel 

The process in Israel was reducing credit growth and mortgage business (and thereby increasing the cost of mortgages), selling credit portfolios to institutional bodies and hedging activities – meaning a waiver of future profits, such as sales law guarantee insurance portfolio’s. Now the expectations are that the banks could increase credit growth and dividend distribution

Mizrahi Tefahot Bank reinsured NIS 15 Billion of its Housing Bonds Portfolio with Global Reinsurers – Led by CRS

Bank Mizrahi Tefahot insured Sales Law Guarantees for Housing Bonds contracts in the amount of 15 Billion NIS. They are not the first join, as Bank Leumi, Hapoalim and Discount already insured their Housing Bond Portfolios. This transaction will improve the capital adequacy ratio of the Bank by 0.25% and improves its ability to grow in its Credit portfolio.

Hapoalim Bank reinsured NIS 27 Billion of its Housing bonds portfolio with Global Reinsurers – Led by CRS

Bank Hapoalim has finalized agreements with highly ranked international Re(insurers), to acquire its housing bond portfolio. The insured part of the portfolio is valued at 27 billion NIS, while the insurance policy protects the bank in case it is required to pay funds to realization of the guarantees.

Discount Bank improved its capital adequacy; reinsured its NIS 2.9 Billion performance bonds portfolio – Led by CRS

Discount Bank recently completed a deal with international (Re)insurers rated at least AA- which insured 80% of the portfolio in the amount of NIS 2.9 billion, which includes performance guarantees given to customers of the Bank’s business division. These customers include defense sector exporters, real estate contractors, infrastructure projects and public transportation projects.

Israeli banks are close to Real Estate Sector limitations

“We have been approached by contractors who were denied financial investments. There are bank branches right next to the Association’s building, and they come straight here after the meeting. It has recently turned into a phenomenon, and we have seen it grow beyond normal proportions,” says Israel Builders Association president Roni Brik, “The major banks, which are the main financiers of real estate projects, have already reached their credit limit set by the bank of Israel. The smaller ones are around the 15% mark, and decided not to go as far as the 20% threshold.”

Hapoalim Bank will reinsure NIS 25 billion of its Housing bonds portfolio with Global Reinsurers- Led by CRS

Bank Hapoalim is in the midst of advanced negotiations with an international (Re)insurers to purchase a coverage in the amount of 25 billion NIS for its housing bonds portfolio. The bank will grant the guarantees to those who purchase the property during the construction time-frame to ensure rights for the buyer. The transaction is led by the corporate division supervisor Jacob Orbach.

Leumi bank intends to reduce the risk on its NIS 25 Billion Housing bond portfolio – The deal is led by CRS

The Bank is in advanced talks with global re-insurers for the purchase of NIS 25 billion in the housing bond portfolio. The deal will allow the bank to release 10 billion in risk assets and increase capital adequacy ratio at 0.3% Leumi bank will purchase an insurance policy for the Sales Law guarantees.

First deal in the market led by CRS – Discount Bank reinsures its NIS 6.8 Billion Housing Bonds Portfolio with Global Reinsurers

Discount purchased an insurance policy in the amount of NIS 4 billion on its housing bond portfolio. The transaction, which took effect last August, will allow the bank to release capital of NIS 1.6 billion and improve its capital adequacy ratio by 0.15%.
This is an innovative transaction banking market in Israel, funded through international re-insurers led by Swiss Re and Munich Re.