Israeli banking system stable but real estate loans too high -regulator | Reuters
Israel's banking system is very stable, although there are some concerns that banks are underwriting too much in loans to real estate companies buying land, the country's banking regulator said on Wednesday.
"From a stability point of view, I am not concerned at all," Yair Avidan, the supervisor of banks at the Bank of Israel, told a news conference after publishing its 2021 annual report.
Still, the economic environment has changed, with the Ukraine conflict harming the supply chain and rising inflation and interest rates, potentially leading to more defaults, he noted. "The (financial) system right now is in very good shape, even though the two banks didn't pay dividends in the first quarter," Avidan said.
Of Israel's five largest banks, two opted against a quarterly dividend. One is paying 50% of net profit and two others will pay 20%, citing the need to retain capital for growth.
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