HAREL GROUP AND BANK LEUMI TO SIGN A STRATEGIC COOPERATION AGREEMENT FOR THE PROVISION OF HOUSING MORTGAGES
February 18, 2016
The agreement is for total investments of NIS 4 billion in 2016 and NIS 4 billion in 2017. The agreement is another step in implementing the investment strategy of Harel which advocates diversification and variation of investment channels and collaboration with leading and experienced institutions for the benefit of Harel’s members
The "Harel Insurance Investments & Financial Services" Group and "Bank Leumi Le-Israel" reported today that they intend to sign a strategic cooperation agreement for the provision of residential mortgages. The boards of directors of both companies confirmed the main points of the contractual agreement between the parties, under which the companies will cooperate in providing residential mortgages to the general public during the years 2016-2017.
This agreement is another step in implementing the investment strategy of Harel which advocates diversification and variation of investment channels and collaboration with experienced institutions that are leaders in their field, for the benefit of Harel’s members. This will enable Harel to diversify the investment mix of its members in a stable investment channel guaranteeing a higher yield at a relatively low level of risk.
Under the agreement, Harel Group will provide joint mortgages amounting to NIS 8 billion (NIS 4 billion in 2016 and NIS 4 billion in 2017) in housing loans that Bank Leumi will provide to its customers. The participation rate of Harel in every joint loan will be 50% at most, while most of the amount to be provided is from the assets of Harel's members.
Bank Leumi will manage the joint loans for the parties, in accordance with the customary procedures and principles in the Bank. Leumi will be the party dealing with the borrowers and will take care of underwriting and managing the loan, and Harel will pay Leumi a monthly management fee.