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Fresh US tax evasion allegations rock Leumi

Bank Leumi might add hundreds of millions of shekels to the NIS 1.1 billion already made in provisions.

Israelis walk past branch of Bank Leumi in Tel Aviv

Bank Leumi (TASE: LUMI) might set aside hundreds of millions of shekels more in provisions as part of the US tax probe affair, in addition to the NIS 1.1 billion already made in provisions.

Bank Leumi today announced that it has begun talks with the US Department of Justice and New York Department of Financial Services (DFS) regarding allegations that the Israeli bank helped New York State customers to evade taxes.

Previously Bank Leumi had reached a settlement with the US Department of Justice for all of the bank’s US customers regarding tax evasion allegations. The bank is expected to pay a fine of NIS 900 million and NIS 200 million more in legal costs for the affair.

“Reuters” estimates that the latest probe could require Bank Leumi to set aside as much as $300 million.

Bank Leumi’s share was down 1.5% on the TASE this morning in heavy trading.

The US authorities are also investigating tax evasion allegations against Bank Hapoalim (TASE: POLI) and Mizrahi Tefahot Bank (TASE:MZTF) but those two banks are yet to set aside any money for provisions. The investigation against Leumi is far more advanced than against the other two Israeli banks.
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Published by Globes [online], Israel business news –

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