Isracard (ISCD) has abandoned plans to buy Israeli digital lender Esh Bank after the parties failed to reach a binding agreement.
In a filing to the Tel Aviv Stock Exchange, the company said the memorandum of understanding signed with Esh had lapsed without a final deal being concluded and would not be renewed.
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The decision brings to an end a proposed transaction that had valued Esh Bank at as much as NIS 500m.
Under the memorandum signed in March, Isracard, which is controlled by Yitzhak Tshuva’s Delek Group, was due to pay NIS250m ($81.9m) for shares.
This was to be followed by a further NIS150m at a later stage, subject to terms to be agreed by both sides.
The framework also provided for an extra NIS100m payment for Esh Bank shares if certain conditions were met.
The planned acquisition was meant to move Isracard nearer to direct banking activity and position it ahead of reforms expected to permit the creation of a “lean bank” in Israel, with regulation and legislation due to be completed next year.
Esh Bank will continue to operate independently. The lender is chaired by Shmuel Hauser and led by chief executive Kobi Malkin.
Its founding group includes Nir Zuk, Alon Shine, Clal Insurance, Yuval Aloni, Alex Liverant and Shiri Raanan. The business began operating last September, three years after receiving a conditional licence from the Bank of Israel.
Esh Bank has built its own banking platform.
Its management has outlined a model under which half of the income generated from customers’ funds would be returned to those customers and credited to their accounts.
The bank also operates a model with no charges on current accounts, compared with monthly costs of NIS 10-50 at other Israeli banks.
It also offers the same guaranteed interest rate across all accounts.
