Three Israeli lenders have divested 43.6% stake in bank services firm SHVA to institutional investors for ILS129m ($35.8m), Reuters reported.

SHVA, or Automated Banking Services, operates and manages most of the credit card network in Israel.

The move is in accordance with a new legislation which requires these banks to reduce their stake in SHVA by January 2021 in order to boost competition in Israel’s credit card market.

Bank Hapoalim divested a 13.4% stake in SHVA, while Leumi sold a 20.9% stake. The remaining 9.3% interest was sold by Israel Discount Bank.

Hapoalim said that it would register a pre-tax profit of ILS23m through the divestment. It would also procure additional ILS19m for a revaluation of its remaining 11.1% stake in SHVA.

On the other hand, Leumi told the news agency that the sale will not have any significant impact on its financial results.

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By GlobalData

In April this year, Mastercard secured the green light from the Bank of Israel to hold a 10% stake in SHVA. The Bank of Israel approved the move after Mastercard signed a deal to acquire the stake from Hapoalim.

In March this year, Bank Hapoalim reported a net profit of $720m for fiscal 2018. The figure represents a 2.5% drop on a year-on-year basis.