Brazil’s Safra banking group aims to build a new portfolio in Israel, working primarily with rich clients in the Mediterranean country, according to reports in the media. The Swiss unit has done some impressive groundwork.

The Safra banking dynasty once built its financial empire starting out in Syria and Lebanon. Now, the company, today based in Brazil, is finding its way back, to Israel. Safra is in talks with the authorities about its return to the country, according to a report by «Haaretz», citing sources it didn’t name.

Safra used to control First International Bank of Israel (Fibi) and Cellcom Israel, a telecommunications company. Now, after six years on the sidelines, Safra is back with a different business model: banking with rich clients.

Careful Preparation for Move

The booming tech industry and real estate business generated a large number of new millionaires in the country in recent years. Not surprisingly, Swiss companies including Credit Suisse, UBS, Pictet and Lombard Odier have private-banking operations in Israel.

Julius Baer, which acquired the Swiss private-banking unit of Israel’s Bank Leumi in 2014, even defined Israel as a focus market.

The dense population of private banks doesn’t prevent Safra to consider its move. The bank in the past months has made several acquisitions, providing it with top-notch access to the rich clientele in Israel.

Strong Swiss Role

The Swiss unit, J. Safra Sarasin private bank, has had a strong role to play in the process. The company acquired the Luxembourg-based private bank of Leumi in 2016, adding some 1.5 billion Swiss francs in assets under management. The foreign units of Israel-based banks tend to cater for their citizens who wish to diversify their investment abroad.

At the end of last year, Safra National Bank in New York bought assets of Hapoalim bank in the U.S. And in October, J. Safra Sarasin bought the private-banking business of Hapoalim in Luxembourg and Switzerland, with some 4 billion francs in assets, «Haaretz» said.

Making Sense – With Hindsight

The transactions frequently were criticized as insignificant in Switzerland, as too small to become profitable business for the bank. Looking at the reported plan to expand to Israel, the acquisition now make sense.

Taking over Hapoalim Switzerland for instance is very much a sign of things to come: the bank has a branch in Israel, which is said to become the launch pad for Safra in the country.