July 16, 2018 / 10:16 AM / in 9 months

Bank of Israel to allow banks to buy back own shares

JERUSALEM, July 16 (Reuters) - The Bank of Israel published on Monday a draft directive to allow the country’s banks to buy back their own shares, potentially increasing the appeal of banking stocks to investors.

Under the directive, Israeli banks would be allowed to purchase up to 5 percent of their share capital, but any buyback would require approval from the banking regulator.

“We are aware that numerous investors see great importance in a company having the option to buy back its shares, as an alternative to distributing a divided,” said Supervisor of Banks Hedva Ber.

“Against the background of the change, banks will be able to use their profits in a more wide-ranging manner — to extend credit and expand activity, to distribute a divided or to buy back shares,” she said.

Leumi, Israel’s second-largest bank, has already said it planned to buy back 2 percent of its shares by March 31, 2019. (Reporting by Ari Rabinovitch and Steven Scheer; Editing by Tova Cohen)

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