Israel Discount Bank
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Israel Discount Bank, Ltd. is a
retail bank Retail banking, also known as consumer banking or personal banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks, which are often described as wholesale banking. Banking servi ...
,
commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with cor ...
,
private bank Private banks are banks owned by either the individual or a general Partner (business rank), partner(s) with limited partner(s). Private banks are not incorporation (business), incorporated. In any such case, creditors can look to both the "enti ...
and
financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
company headquartered in
Tel Aviv Tel Aviv-Yafo ( he, תֵּל־אָבִיב-יָפוֹ, translit=Tēl-ʾĀvīv-Yāfō ; ar, تَلّ أَبِيب – يَافَا, translit=Tall ʾAbīb-Yāfā, links=no), often referred to as just Tel Aviv, is the most populous city in the G ...
with 112 branches throughout
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
. Discount Bank is a
public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (l ...
traded on the
Tel Aviv Stock Exchange The Tel Aviv Stock Exchange (TASE; ; colloquially known as The Bursa, ) is Israel's only public stock exchange and a public company that has been traded on the Tel-Aviv Stock Exchange since August 1, 2019. Legally, the exchange is regulated by ...
under the symbol DSCT. It provides personal banking, business banking and
private banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
products and services through physical branches,
online banking Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial inst ...
and
mobile banking Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses ...
.


History

Discount Bank was established on 5 April 1935, as ''Eretz Yisrael Discount Bank'' Ltd., by Leon Recanati and his partners, Yosef Albo and Moshe Carasso. In its early days, Discount Bank operated out of a small hotel on Nachlat Binyamin Street in Tel Aviv. It later moved to its permanent location at 39 Yehuda Halevi Street. Today, Discount Bank's headquarters are located at the
Discount Bank Tower The Discount Bank Tower is a skyscraper located on Yehuda HaLevi Street 23 corner with Herzl Street in Tel Aviv, Israel. It is the headquarters of the Discount Bank.
, a 30-story
skyscraper A skyscraper is a tall continuously habitable building having multiple floors. Modern sources currently define skyscrapers as being at least or in height, though there is no universally accepted definition. Skyscrapers are very tall high-ris ...
located at 23 Yehuda HaLevi Street in Tel Aviv, which completed construction in 2006. Discount Bank derives its name from the word "disconto", discount of bills. Discount Bank began its operations at a time of relative economic prosperity due to foreign capital that was brought into the country by members of the
Fifth Aliyah The Fifth Aliyah ( he, העלייה החמישית, ''HaAliyah HaHamishit'') refers to the fifth wave of the Jewish immigration to Palestine from Europe and Asia between the years 1929 and 1939, with the arrival of 225,000 to 300,000 Jews. The F ...
in 1935, and grew significantly in its initial years of operation. Economic growth ground to a halt with the outbreak of the
Arab Revolt The Arab Revolt ( ar, الثورة العربية, ) or the Great Arab Revolt ( ar, الثورة العربية الكبرى, ) was a military uprising of Arab forces against the Ottoman Empire in the Middle Eastern theatre of World War I. On t ...
in 1936, and the economic situation grew even more dire three years later, with the outbreak of
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
. Despite the deterioration of the economy during those years, Discount Bank managed to increase its profit, especially thanks to its contribution to the
Yishuv Yishuv ( he, ישוב, literally "settlement"), Ha-Yishuv ( he, הישוב, ''the Yishuv''), or Ha-Yishuv Ha-Ivri ( he, הישוב העברי, ''the Hebrew Yishuv''), is the body of Jewish residents in the Land of Israel (corresponding to the s ...
by extending loans with good terms as a response to the difficult legislation by the British Mandate, which limited the withdrawal of deposits due to the fear of economic collapse. Alongside its financial activity, the bank contributed to the strength of the
Yishuv Yishuv ( he, ישוב, literally "settlement"), Ha-Yishuv ( he, הישוב, ''the Yishuv''), or Ha-Yishuv Ha-Ivri ( he, הישוב העברי, ''the Hebrew Yishuv''), is the body of Jewish residents in the Land of Israel (corresponding to the s ...
through the establishment of ''Kadima'', an organization that granted scholarships, opened an assistance center for the needy and, in conjunction with the
Jewish Agency for Israel The Jewish Agency for Israel ( he, הסוכנות היהודית לארץ ישראל, translit=HaSochnut HaYehudit L'Eretz Yisra'el) formerly known as The Jewish Agency for Palestine, is the largest Jewish non-profit organization in the world. ...
, helped establish agricultural settlements for immigrants from Arab countries. In 1944, Discount Bank acquired the Haifa-based Mercantile Bank and several years later also acquired the local operations of the
Ottoman Bank The Ottoman Bank ( tr, Osmanlı Bankası), known from 1863 to 1925 as the Imperial Ottoman Bank (french: Banque Impériale Ottomane, ota, بانق عثمانی شاهانه) and correspondingly referred to by its French acronym BIO, was a bank ...
,
Barclays Bank Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...
and Hollandsche Bank-Unie. In 1945, Recanati passed away and management moved to his sons. Uri Levin was named CEO of Discount Bank in July 2019 and has served in this position since December 2019


Milestones

In the 1950s, Discount Bank opened additional branches in Europe. It began investing in Israeli companies through the Israeli Company for Financing and Investment, which it had acquired. In those years, thanks to the bank's accelerated opening of branches around Israel and extension of its opening hours to the afternoon, the bank grew to become the second largest bank in Israel. At the beginning of the 1960s, the bank expanded its activity both in Israel and overseas. In 1961, for the first time in the banking industry, the investment company, Discount Investments, was founded. What's more, the bank was awarded the right to issue
Diners Club A diner is a small, inexpensive restaurant found across the United States, as well as in Canada and parts of Western Europe. Diners offer a wide range of foods, mostly American cuisine, a casual atmosphere, and, characteristically, a comb ...
credit cards and was the first bank to offer its shares to the public. In 1964, the bank was awarded the Kaplan Prize for being the first bank to computerize its operations. In the 1970s, the bank continued its momentum of growth and expansion, integration of advanced technologies and modern computer systems and improvement of customer service. In 1970, the bank acquired 50% of
Barclays Bank Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...
and the name of the bank changed to ''Barclays-Discount''. It later acquired full ownership. Additionally, ''Mercantile Bank'' was sold to Barclays-Discount Bank. In 1974, the ''Discountomat'', Israel's first ATM was launched. In 1979, ''Visa Cal'' was founded in partnership with
Bank Leumi Bank Leumi ( he, בנק לאומי, lit. ''National Bank''; ar, بنك لئومي) is an Israeli bank. It was founded on February 27, 1902, in Jaffa as the ''Anglo Palestine Company'' as subsidiary of the Jewish Colonial Trust (Jüdische Kolonia ...
. In 1981, the bank's virtual branch, ''Discount Telebank'' was established, making it the first banking call center in Israel and in the world. The same year, the bank also began operating its ''Bankonit'' - a mobile bank that operated for several years in the Lachish region. In 1983, "satellites" were opened for the first time in Israel, enabling customers to conduct banking transactions independently, outside of standard work hours. That same year, the bank - along with other banks - was nationalized by the Israeli government, due to the bank stock crisis. Following the 1983 Israel bank stock crisis, the bank's ownership was transferred to the government of Israel. In 1987, the Discount Group established the investment organization, Tachlit Investment House, which was engaged, among other things, in the sale of financial products, investment portfolio management and more. In the first decade of the 21st century, activity centered around privatization of the bank and the sale of the government's holdings in it. In 2004, the process of privatizing the bank began, and this was completed in 2006, with the acquisition of 26% of the bank's shares by the Bronfman-Sharan Group. That same year, shares were also sold to
Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Sto ...
. In 2010, the government sold the balance of its holdings in the bank. In 2010, ''Mafteach Discount'' (Discount Key) was launched, offering benefits and discounts to credit cardholders, while combining an opportunity to makes small but regular deposits into a savings account with each purchase. In 2012, the bank was forced to sell ''Tachlit'' ETNs to ''Dash'' Investment House, after the Supervisor of the Banks ordered it to sell its holdings in the company (20%) by 2013.


Digital Banking & Fintech

Discount Bank has gained media attention for its focus on
digital banking Digital banking is part of the broader context for the move to online banking, where banking services are delivered over the internet. The shift from traditional to digital banking has been gradual and remains ongoing, and is constituted by diffe ...
and
fintech Fintech, a portmanteau of "financial technology", refers to firms using new technology to compete with traditional financial methods in the delivery of financial services. Artificial intelligence, blockchain, cloud computing, and big data are r ...
partnerships. In 2017, Discount Bank signed agreements with several fintechs, including ''Icount'' and ''PayBox'', to improve payment services and open banking abilities. Of note, Discount Bank's creation of an
artificial intelligence Artificial intelligence (AI) is intelligence—perceiving, synthesizing, and inferring information—demonstrated by machines, as opposed to intelligence displayed by animals and humans. Example tasks in which this is done include speech re ...
-driven digital assistant occurred through the successful partnership with
Personetics Technologies Personetics Technologies is a financial technology (fintech) software company headquartered in Tel Aviv, Israel. The company's product uses artificial intelligence to analyze bank's customer transaction data in real-time and use this analysis to ...
. The AI, called Didi, was the first of its kind for Israel's banking industry. In 2019, Discount Bank launched ''Business+'', a mobile banking app for business banking customers that earned several awards, including the EMEA Gartner Eye on Innovation 2018, the 2017 and 2018 IT Awards by ''People and Computers''.


Subsidiaries

* Israel Credit Cards, Ltd. (CAL): Israel's leading issuer of credit cards, including
Visa Visa most commonly refers to: *Visa Inc., a US multinational financial and payment cards company ** Visa Debit card issued by the above company ** Visa Electron, a debit card ** Visa Plus, an interbank network *Travel visa, a document that allows ...
and MasterCard. Discount Bank has a 72% ownership stake. * Discount Capital: As Discount Bank's investment banking arm, Discount Capital managed a
The shekel sign (₪) is a currency sign used for the Israeli new shekel, which is the currency of Israel. Israeli new shekel (1986–present) The Israeli new shekel is denoted in he, שקל חדש (''šéqel ħadáš'', , lit. "New Shekel") ...
1.2 billion portfolio as of 2019. It invests directly in companies and business ventures, as well as in investment funds and mezzanine investments. * Tafnit Discount Asset Management:
Asset management Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...
of investment portfolios for private clients, private and public companies, non-profit organizations and government agencies. * IDB Bank: an American multinational
private bank Private banks are banks owned by either the individual or a general Partner (business rank), partner(s) with limited partner(s). Private banks are not incorporation (business), incorporated. In any such case, creditors can look to both the "enti ...
,
commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with cor ...
and
financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
company headquartered in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
with locations in the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
,
Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...
and
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
.


Controversy

In 2021, IDB and its subsidiary
Mercantile Discount Bank Mercantile Discount Bank ( he, בנק מרכנתיל דיסקונט בע"מ) is a major commercial bank in Israel, and is a subsidiary of Israel Discount Bank. It is the sixth largest bank in Israel. Controversies Involvement in Israeli set ...
reached a settlement of ₪343 million ( A$137 million) with the
Australian Tax Office The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system, superannuati ...
(ATO), after allegedly conspiring with the
Sydney Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mountain ...
-based Binetter family to engage in
tax fraud Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...
. The banks reportedly allowed the family to route "back-to-back" loans through their accounts, "in effect lending their own money and paying interest to themselves", in exchange for a percentage of the balance. The family then fraudulently claimed the interest expense as a tax deduction, with a bank executive giving false sworn evidence that the transactions were at arm's length. The bank "made no admission of culpability in the settlement agreement" but stated it would appoint a former judge to conduct an independent inquiry into the matter.


Criticism


See also

*
Banking in Israel Banking in Israel has its roots in the Zionist movement at the beginning of the 20th century prior to the establishment of the State of Israel in 1948. History The World Zionist Organization established the Anglo-Palestine Bank in 1903 (which lat ...
*
Economy of Israel The economy of Israel is a developed free-market economy. The prosperity of Israel's advanced economy allows the country to have a sophisticated welfare state, a powerful modern military said to possess a nuclear-weapons capability, modern inf ...


References


External links


Discount Bank official website
{{DEFAULTSORT:Discount Bank 1935 establishments in Mandatory Palestine Banks established in 1935 Dis Companies listed on the Tel Aviv Stock Exchange Financial services companies of Israel Israeli brands Finance in Israel Recanati family Companies based in Tel Aviv