The structure of banking system - Ciobu Stela

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Although in terms of the number of banks within it the banking system contracted in 2004, activity in the system expanded in terms of the number and types of banking services offered, financial instruments supplied, and distribution channels via which services and products are offered to the public. The process of change from government ownership and reversion to private ownership in the banking system continued. The competition between the banking system and non-banking financial institutions (which constitute a competitive threat) increased during the year, but was still low by worldwide standards. However, the concentration of the banking groups increased, continuing a trend that has been evident since the end of the 1990s. The financial and banking services that the system supplies in the area of traditional banking include services in the capital market, such as advice in securities and financial asset trading, portfolio management, mutual fund management, provident and advanced study fund management, underwriting, distribution and issues. Part of the banks, including some (but not enough) foreign banks supply focused financial services and in particular, specialize in corporate and private banking. 2. STRUCTURE OF THE GROUP AND THE RANGE OF SERVICES At the end of 2004 five large banking groups operated in Israel alongside a shrinking group of independent, mostly small banks, continuing the trend of the last few years (Figure 2.1). At the end of the year, 34 banking corporations operated in the Israeli banking system, as well as 18 commercial banks, 6 mortgage banks, 2 foreign banks and a number of other institutions (Table 2.1). The regular commercial banks supplied financial services via 951 branches throughout the country (Table 2.2) and 123 branches abroad, 57 of them offices of subsidiaries (Table 2.3)