Sunday, June 10, 2012

to Bank or not to Bank?

Yair Assaf-Shapira 

At the start of 2012, a total of 1,421 bank branches operated within the State of Israel (including branches in Jewish settlements in the territories of Judea and Samaria). Thus there were 18.1 branches per 100,000 persons within the population of the country, which reached 7,837,000 at the end of 2011. This figure reflects the accessibility to financial services, and it is lower than that of most European countries and the United States.

The Netherlands, for example, has 23 branches per 100,000 persons, the US has 36, France has 43, Italy has 67, and Portugal has 76. Some European states, however, have a low ratio, such as Austria with 11.

The distribution of bank branches in relation to population within various cities can serve as an indication of the centrality of the city in relation to other cities and its environs, as well as the quality of service the banks provide to the city’s public.

A total of 138 commercial bank branches operate in Jerusalem, constituting 10% of the total for Israel. Similar to the national average, 17.5 branches existed for every 100,000 persons in the city, which had a total of 788,000 residents (at the close of 2010).

Salient among the cities with populations of 50,000 or more (at the close of 2010) was Tel Aviv, with 65 branches per 100,000 persons. This is a result of Tel Aviv-Jaffa being the financial center of Israel and a metropolitan center that provides services to a population significantly larger than the number of city residents. Other cities operating a large number of bank branches relative to their population are Ramat Gan (45), Kfar Saba (27), and Ra’anana (26).

Some banking services are also available at post office branches. Jerusalem has 51 post office branches, that is, 6.5 branches per 100,000 persons. This number is low relative to Israel’s main cities. For example, in Tel Aviv-Jaffa, 13.1 branches operate for every 100,000 persons, 11.6 in Haifa, 10.4 in Ashdod, and 10.2 in Be’er Sheva.


Data sources: Bank of Israel; International Monetary Fund – Financial Access Survey; the Central Bureau of Statistics; the Israel Post Office.