Leumi History

The origins of the Jewish Colonial Trust trace back to Theodor Herzl's influential pamphlet, "Der Judenstaat" ("The Jewish State"), where he laid out his ambitious vision for the creation of a Jewish state. Herzl envisioned a massive organization called "The Jewish Company," which would be established as a joint stock company under English law and protection. This company was to control most of the land in Palestine and manage the relocation of millions of Jews from around the world, facilitating their settlement in both urban and rural areas and kick-starting agriculture, trade, and industry. Herzl estimated the company's capital at around one billion marks (approximately £50,000,000 or $200,000,000).

The Jewish Colonial Trust

In reality, the Zionist movement lacked the political and financial resources to realize Herzl's grandiose plans. The actual Jewish Colonial Trust, established in London, was a scaled-down version of Herzl's proposed company, with significantly less capital. Nevertheless, the Trust played a crucial role in the Zionist efforts to purchase land and settle Jewish immigrants in Palestine. Despite its limited resources, the Jewish Colonial Trust was instrumental in laying the groundwork for the eventual establishment of the State of Israel.

Establishment and Growth of the Anglo-Palestine Bank

The Jewish Colonial Trust gave rise to the Anglo-Palestine Bank, founded in 1902 as a subsidiary to manage operations in Palestine. The bank's first branch opened in Jaffa in 1903 under the leadership of Zalman David Levontin. Its early activities included land acquisition, importing goods, and securing concessions. Additional branches were soon established in Jerusalem, Beirut, Hebron, Safed, Haifa, Tiberias, and Gaza.

The Anglo-Palestine Bank provided long-term loans to farmers and supported the Ahuzat Bayit association, which developed the first neighborhood in Tel Aviv. During World War I, the Ottoman government, viewing the bank as an enemy entity due to its English registration, attempted to shut it down and seize its assets. After the war, the bank expanded its operations, relocating its main branch from Jaffa to Jerusalem in 1932. During World War II, the bank financed industries producing supplies for the British army.

Evolution into Bank Leumi

Following the establishment of the State of Israel in 1948, the bank was granted the authority to issue new banknotes. In 1950, it was renamed Bank Leumi le-Israel (National Bank of Israel). With the creation of the Bank of Israel in 1954, Bank Leumi transitioned into a commercial bank.

In 1971, Bank Leumi acquired Arab Israel Bank, which primarily serves Arab citizens in northern Israel and the Triangle region. The Israeli government nationalized Bank Leumi in 1983 following the Bank Stock Crisis.

Recent Developments

In 2007, the bank faced allegations of holding funds deposited by Jews who perished in the Holocaust. Although it denied wrongdoing, Bank Leumi agreed to pay 130 million NIS in 2011 after a state inquiry revealed significant unclaimed funds in dormant accounts. In the same year, Bank Leumi purchased Geneva-based Banque Safdie SA for CHF 143 million, merging it with Bank Leumi Switzerland Ltd to create Leumi Private Bank in early 2012. However, Leumi closed its Melbourne office in 2013.

In 2014, Bank Julius Baer acquired Bank Leumi's private banking assets, including Bank Leumi (Luxembourg) S.A. In 2019, Dr. Samer Haj-Yehia was appointed chairman. In 2022, Bank Leumi USA was sold to Valley National Bank for $1.2 billion in cash and stock. In 2023, Pablo Rosenberg and Gal Toren became the bank's presenters.

Bank Leumi's journey from Herzl's vision in "The Jewish State" to becoming a significant financial institution highlights its pivotal role in the economic development of Israel and its continued evolution in the global banking sector.