BNP Paribas (Paris:BNP; Pink Sheets:BNPQY) has become the fourth foreign bank to conduct full business activity in Israel, after completing the upgrade of its representative office in Tel Aviv.Â The bank opened the office in 1996. Association of Foreign Banks in Israel president Charles Reisman will head the bankâ€™s Tel Aviv branch.The other foreign banks with branches in Israel are Citigroup (NYSE:C), HSBC plc (NYSE;HBC; LSE:HSBA), and the State Bank of India (BSE:500112), which operates in the diamond industry. During the late 1990s, numerous banks opened representative offices in Israel and other banks considered opening offices, but the recession and intifada put paid to these plans.
15 foreign banks currently have representative offices in Israel, including Deutsche Bank AG (NYSE: DB; LSE: DBK; XETRA, AEX, SWX, ATX: DBKG), UBS AG (NYSE; SWX:SWX), and Union Banque Privee (UBP). These offices are defined as â€œbusiness officesâ€ and may not conduct banking activity, only direct customers to another branch and provide information.
In contrast to past hopes, the entry of BNP Paribas into Israel is not expected to fundamentally change Israelâ€™s banking sector or increase competition in the retail banking sector. Like Citigroup and HSBC, BNP Paribas will focus on investment banking, foreign trade credit, financing large deals, and private banking services for the very wealthy. The bank reportedly has no plans to enter the household banking sector.