Regulator demands fairness from Israeli banks as they cash in on hefty fees |
Israel’s banking supervisor, Daniel Hahiashvili, said Monday that fairness toward customers and more competition were needed in the banking system, as lenders rake in record profits fueled by high interest rates and costly fees levied on an increasingly debt-burdened public.
“Our message to the banking system is that fairness is not just a nice-to-have,” said Hahiashvili, speaking at a press conference in Tel Aviv. “We see the discourse about fairness by customers, and banks that do not respond will be in trouble.”
Hahiashvili stressed that Israel’s highly profitable banks need to show the public that the financial gains also translate into competition, fairness, and better terms and conditions for customers. A banking system that generates high profitability over time should also demonstrate that it works in the public interest, whether through increased competition, improved deposit terms, handling fees, relief measures, or more proactive customer service, he said.
Hahiashvili made the comments as the Bank of Israel published its annual survey of the local banking system for 2025, which showed that lenders continued to generate record profits despite three years of war, an unstable geopolitical environment, and a real estate market that is under pressure.
In 2025, the country’s banks posted record profits of NIS 32 billion ($11 billion), an 8.7 percent increase over the previous year. Behind the soaring financials stand millions of Israelis whose high interest payments, credit fees, and other charges have fueled lenders’ payday.
The country’s concentrated banking system is largely controlled by five large banks, which have been accused of profiteering thanks to........