At the 2025 Economic Conference held by Ma’ariv and Walla at the Carlton Hotel in Tel Aviv, Bank Leumi CEO Hanan Friedman addressed the struggles confronting Israeli society amid the war. He opened his remarks by mentioning the resurgence of hostilities in Gaza: “No one considered canceling this conference; this serves as further proof of Israel’s social resilience, which also affects its economic resilience.”
He said, “Numerous significant figures in Israel’s economy are present today. I trust you all concur that the resilience of the Israeli economy throughout the prolonged conflict and its current recovery is no short of a miracle”, stated Friedman. “This is a phrase I often hear from top bankers globally when I meet with them, and it’s the term consistently used by leading investors in my discussions with them.”
“The monetary policy implemented by the Bank of Israel, led by Governor Prof. Amir Yaron, has undeniably demonstrated effectiveness throughout the war and significantly aided the economy’s recovery,” he stated. “The Governor and the Banking Supervisor Danny Khachiyashvili do not always make things easy for the banking system. Yet, they remain rational, equitable, and adept at directing the banks and the economy responsibly and wisely towards safer practices.”
“The thoughtful actions of the Governor of the Bank of Israel resulted in a 1% growth in the Israeli economy in real terms, even amidst a year of war. I want to remind you that initial forecasts from rating agencies predicted negative growth. The intelligent policies implemented by the Governor, coupled with the swift response from the business sector—which, similar to the COVID crisis, made the necessary adjustments to the situation—effectively saved the Israeli economy during the war,” Friedman added.
The CEO observed that Israel’s economy is built on three pillars of resilience: “Israeli society, recognized for its exceptional strength; the effective monetary policy of the Bank of Israel; and the robust banking system.
The banks, strongly supported by the Governor and the Banking Supervisor, took calculated risks during the war to promote economic growth. They successfully encouraged business expansion without increasing risk indicators. At Bank Leumi, these indicators even decreased, which serves as a testament to the success of our actions.”
He also mentioned, “In addition to the rapid increase in business activity, the banking system has been mobilized like never before for Israeli society – through both social initiatives and customer relief. At Leumi, we have already invested hundreds of millions of shekels into Israeli society and will persist in this effort. We view this as an essential part of our commitment to the community we serve.”
Criticizing banks is easy, but responsibly considering the long-term effects is essential. We shouldn’t overlook the positives in the process. In Israel, banks have an average financial margin of approximately 2.68%, significantly lower than the global average of 3.16%, showing a 20% difference. This gap is noteworthy,” he noted. Friedman pointed out, “For example, if Bank Leumi operated with the same margin as Bank of America, a major U.S. bank, its profit could rise by more than 2 billion shekels. Additionally, aligning Leumi’s commission rates with Bank of America’s could further enhance profitability by 41%.”
To emphasize the banking system’s significance in Israel’s economy, he introduced a surprising statistic: “In 2024, Israeli banks contributed approximately 10% of the total tax collected by the Israel Tax Authority. Indeed, 10%. This illustrates the banks’ vital role in the state’s revenue. Moreover, the Israeli public reaps the benefits of effective bank management and shares in their success, as they own most bank shares through their pensions. The rise in bank share prices last year greatly benefited all savers. Additionally, customers enjoy the advantages of the banking system’s operations. Banks in Israel are notably more innovative and advanced compared to their global counterparts, a result of the Israeli ethos that fosters innovation and digital progress.”
Friedman stated that innovation is evident in the shortening of processes for customers. “For instance, at Leumi, five years ago, when a mid-market company applied for credit, it took approximately 6.5 weeks from the inquiry to the required response. Today, it takes no more than 48 hours. This improvement is a result of investments in technology and innovation. Such investments contribute to the dynamism of the Israeli economy.”
“Indeed, for a serious discussion, it’s crucial for all parties to recognize this: the banking system is the cornerstone of the Israeli economy and plays a critical role in its growth and long-term stability. Without a robust, accountable, and stable banking system, Israel’s economy won’t sustain these remarkable outcomes—results that serve all Israeli citizens,” concluded Friedman in his comments
“This was clearly validated during the COVID crisis and again during the ongoing war. Continued support to boost economic activity across all sectors, aid for diverse groups within Israeli society, and substantial investment in technology are vital for navigating future challenges.” He concluded his speech by emphasizing the urgent need for the return of the Israeli hostages held by Hamas – “Above all, we hope and pray for the prompt return of all hostages to their homes.”
