Israel’s Bank Hapoalim sees huge opportunities for UAE – Israel banking cooperation

Dubai: The normalisation of relations between the UAE and Israel has opened huge opportunities for businesses and financial institutions from both countries to cooperate, Dov Kotler, CEO of Bank Hapoalim told Gulf News in a recent interview in Dubai.

Founded almost 100 years ago, Bank Hapoalim is a household brand for consumer and corporate lending and has one of the largest retail branch network in the country.

Bank Hapoalim has been in the forefront to establishing ties with UAE banks and financial institutions following the normalisation of relations between the two countries.

The Israeli bank entered to agreements with two the leading UAE banks such as the First Abu Dhabi Bank (FAB) and Emirates NBD in early September this year.

Our priority is to extend banking support to our business clients who want to do business in the UAE. In the same way support UAE businesses that are keen to establish and export to Israel. Our tie-up with leading banks in the UAE will make the fund flows between the countries smooth.

Dov Kotler, CEO of Bank Hapoalim

Last month, the bank signed two separate agreements with Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) two international financial centers in the UAE.

Investment flows

While the multiple agreements with UAE institutions cover a wide range of areas such as development and promotion of financial technologies, innovation, ecosystems, and market opportunities, Kotler said his immediate focus is on facilitating business and investment flows between both the countries.

“Our priority is to extend banking support to our business clients who want to do business in the UAE. In the same way support UAE businesses that are keen to establish and export to Israel. Our tie-up with leading banks in the UAE will make the fund flows between the countries smooth,” said Kotler.

Since the normalisation of relations between the two countries, two-way investment flows and exports and imports have started. “Of course, these investment and trade flows have started in small doses, but clearly there is a lot of interest on both sides pointing to opportunities for banks in both countries,” he said.

Fintech expertise

Financial centers and banks in the UAE have expressed their interest in joining hands with Israeli banks in jointly developing financial technologies.

Kotler said, Israel is known for its expertise in tech startups, however, he added that his visits to the UAE have convinced him that the banks in the UAE are very advanced in the use of latest in fintech.

“From my interactions with FAB and Emirates NBD, I found that both these institutions have very advanced technology fintech-wise. That gives us an opportunity to exchange opinions and we can learn from each other,” said Kotler.

Going forward the bank expects collaborate on a range of fintech-related initiatives including the development of fintech solutions to facilitate international trade, business and financial services activities between the UAE and Israel, as well as the support of fintech companies and entrepreneurs seeking to scale their presence and deployment across the UAE and Israeli markets.

UAE financial centers

Bank Hapoalim expects to develop a long-term relation with ADGM and DIFC. The new agreements will support the digital transformation of the financial services and connect the economies in the UAE and Israel.

Kotler sees the tie-up with the two financial centers will open doors for the bank to participate in these dynamic financial eco-systems in the region

“Both these agreements will enable fintech companies, and customers of Bank Hapoalim, access to a new world of opportunities and are sure to help foster cross-border innovation,” said Kotler.

He expects the co-operation with the financial centers will see investment flows between both the countries picking up pace. In the first year itself, Kotler expects a two-way investment flow in excess of $500 million.

UAE branch

Bank Hapoalim’s CEO said it is too early to commit on opening a branch either on shore or in the financial free zones in the UAE.

“The banking sector in the UAE is well developed and has huge expertise. There is a lot of scope for cooperating with the UAE banks for supporting Israeli investors coming to the UAE rather than opening our own branch here,” said Kotler.

He said Bank Hapoalim is keen to finance and extend banking support to Emirati entrepreneurs planning to invest or do business in Israel.

Trade finance

Within a short timespan since the normalisation of relations between the two countries, a number of trade delegations have visited both countries exploring trade and business opportunities. Kotler said, these delegations are clearly identifying opportunities in several areas such as food security, biotech and fintech, and once they are ready to go, banks from both sides are ready to facilitate necessary financial transactions.

“We expect to see some transactions happening soon, but it is too early to report anything now,” he said.

Going forward, Kotler sees clear opportunities for Israeli exporters to utilize the trade hub status of the UAE and the well-developed logistics and transport infrastructure to gain foothold in many regional markets.

While the UAE and Bahrain have normalized the relations, there are expectations, more countries in the region will eventually follow opening a vibrant trade channel between Israel and wider Middle East Africa region.