Following the closing of the criminal investigation against Zion Kenan, there is no change in the position of the Bank of Israel regarding his tenure as CEO of Bank Hapoalim

04.03.12

Following the closing of the criminal investigation against Zion Kenan, there is no change in the position of the Bank of Israel regarding his tenure as CEO of Bank Hapoalim

The Supervisor of Banks is considering prohibiting bank corporation directors and senior executives from being granted credit from the bank corporation in which they serve.

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On January 17, 2012, the State Attorney's Office announced that it has decided to close the investigation against Bank Hapoalim CEO Zion Kenan due to a lack of sufficient evidence. After examining the findings of the investigation, and the State Attorney's position, and after considering the range of relevant factors, the Supervisor of Banks decided not to change his position regarding the appointment and tenure of Mr. Zion Kenan as Chief Executive Officer of Bank Hapoalim.

With that, the Supervisor of Banks found several deficiencies in the process of approval of the credit request of Mr. Dan Dankner, who at the time was Chairman of the Board of Directors of Bank Hapoalim, and found that Mr. Kenan, who was then Head of Corporate Banking at Bank Hapoalim and the senior executive who brought the request to the Board of Directors' Related Parties Committee, bears responsibility for them. Against this background the Supervisor of Banks decided to comment on Mr. Kenan.

The Bank of Israel attributes great importance to the conduct of banking system employees, particularly those who head it, and believes their conduct must be and even appear proper. It should be noted that already in October 2010, the bank was required to deal with deficiencies which arose, and to update the bank's procedures, so that they would represent more correct administration of the approval and granting of credit to related parties, and the bank did indeed do so. In addition, the Supervisor of Banks is considering issuing a directive which would prohibit banking corporation directors and other senior executives from being granted credit from the bank corporation in which they serve.