Bank Leumi to Link U.S. Units Under One Name

Bank Leumi Trust Co. of New York said it would change its name and consolidate its U.S. operations in an effort to become more efficient.

As of Saturday, the $2.2 billion-asset unit of Tel Aviv-based Bank Leumi le-Israel will be known as Bank Leumi USA.

The name change better reflects the bank's major businesses: private banking and financing trade between the United States and Israel, said Zalman Segal, vice chairman, president, and chief executive officer.

The consolidation will produce relatively minor cost savings-estimated by Mr. Segal to total in the millions-and boost assets to $2.7 billion.

More important, Mr. Segal said, the pooling of resources will aid business development projects, especially efforts to build up private banking services.

"We will gain efficiencies that will give us the capabilities to provide better service to our customers in the Midwest and West," Mr. Segal said.

Analysts said the consolidation, which follows a period of severe cutbacks in Bank Leumi's U.S. operations, appeared to make sense.

"It's now being reduced to a manageable scale," said Ian McEwan, a London-based bank analyst with Lehman Brothers. "It's an obvious thing to do."

After suffering from real estate loan losses in the 1980s, Bank Leumi in New York spent the early part of the 1990s downsizing. It cut its work force to 300 from a peak of 1,200 in 1990. The bank also divested 17 branches in the metropolitan area, most of them to Republic New York Corp.

Mr. Segal, who was named president of the New York operations in 1989 and who is overseeing the reorganization, said those troubles are past. "We are now well-capitalized and well positioned for the future," he said.

From its headquarters in the heart of New York City's diamond district, state-chartered Bank Leumi USA will gain four branches: in the New York fashion district, a few blocks from headquarters; in Chicago's downtown Loop; and in Beverly Hills and Encino, Calif.

Separate state-chartered banks in Illinois and California will be eliminated and brought within the New York unit, Mr. Segal said. Executives who ran those operations will become senior officers at the combined bank but will remain in their current locations, he said.

An outpost in Miami that collects deposits from non-U.S. citizens but is not a federally insured branch will not be part of the consolidation, Mr. Segal said.

The Israeli government, which owns a 63.5% stake in Bank Leumi USA's parent along with controlling interest in other Israeli banks, announced recently it would divest its interests over two years. Mr. Segal said the reorganization of Leumi's U.S. operations was unrelated to the Israeli privatization effort.

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