In 2022 the public enquiries unit of Mizrahi Tefahot Bank received 615 complaints classified under "Other (Agud merger)". That is 14.22% of all complaints the bank received that year. In 2023 another 540 complaints were logged under "Other (including Agud merger)", 11% of the total. These figures come from the public enquiries reports that the bank itself publishes on its website.
This article brings together what Union Bank of Israel (Bank Agud) and Mizrahi Tefahot wrote in their official reports about the transfer: how customers were converted, what went wrong in their own words, and what a customer whose account or loan did not transfer properly can ask for.
In short
- The merger was completed on December 29, 2022. Bank Agud ceased to exist and was struck from the Registrar of Companies.
- Customers who did not move voluntarily were converted unilaterally in the second half of November 2022. Bank Agud’s final report says "faults that occurred were handled ad hoc".
- Corporate customers were converted "in a non-automated manner".
- At the end of 2022 the platform for retrieving and transferring historical information was still not complete.
- Mizrahi Tefahot itself wrote that it received enquiries from Agud customers "for whom the transfer process was not completed optimally from their point of view".
How Agud customers were moved
On September 30, 2020 Mizrahi Tefahot completed an exchange tender offer for 100% of Bank Agud’s shares. Customer conversion began in the second quarter of 2021 and proceeded gradually. In its 2022 corporate responsibility report Mizrahi Tefahot described the conversion as "human and individual".
Customers who did not move voluntarily were converted unilaterally. Bank Agud’s June 2022 report says external consultants were hired "with the knowledge, methodology and tools to carry out the unilateral conversion, including a dedicated platform for data cleansing and conversion". The centralized conversion ran in the second half of November 2022, about a month before the statutory merger.
Bank Agud’s final report: faults "handled ad hoc"
Bank Agud’s final financial report, as of December 29, 2022, describes the IT risk in these words (translated from Hebrew):
"The unilateral conversion of the remaining customers was carried out successfully in a centralized manner; within this, faults that occurred were handled ad hoc. In addition, the remaining corporate customers were converted unilaterally in a non-automated manner."
The report does not say which faults occurred, how many customers were affected or how each fault was fixed. The same page lists tasks left for the first quarter of 2023, including "consolidating computer sites, completing the platform for retrieving historical information and transferring it". On merger day, the tool meant to retrieve Agud customers’ historical data was not finished.
The merger agreement made completion conditional, among other things, on written confirmation from the officer responsible for information technology at the absorbing bank that technological and operational solutions were in place "to enable the transfer of the target company’s customer files, including all information required by any law". That separate confirmation was not found in the Registrar of Companies file that was reviewed.
The numbers
- 2022, Mizrahi Tefahot: 615 complaints on "Other (Agud merger)", 14.22% of 4,661 complaints received.
- 2022, Bank Agud itself: 468 complaints and 532 requests. 37% of Agud’s complaints that year concerned current accounts.
- 2023, Mizrahi Tefahot: 540 complaints on "Other (including Agud merger)", 11% of 4,623 complaints received.
- Share of complaints found justified in 2022: about 20% at Mizrahi Tefahot, about 20% at Agud and about 9% at Bank Yahav.
The bank explained the gap itself: "the high rate of justified complaints at Mizrahi-Tefahot and Agud was also affected by the merger process, which raised the number of enquiries and the rate of justified ones."
An account or loan that did not transfer properly
The reports do not identify any customer or explain what happened to any particular record. A customer whose account, loan or standing orders did not appear after the transfer, or appeared with wrong data, does not have to accept a general answer. A loan that does not show in the system has not necessarily been cancelled, and a balance the bank shows is not necessarily correct. The documentation decides.
This also concerns Agud Leasing customers. According to Bank Agud’s final report, from November 1, 2022 Mizrahi Tefahot provided computing services to the subsidiary Agud Leasing, known today as Mizrahi Tefahot Leasing.
What to ask the bank for in writing
- The account and loan numbers in the Agud system and in the Mizrahi Tefahot system, and how they are linked.
- The date your record was converted and its status before and after.
- A personal balance reconciliation: principal, interest, charges and payments, before and after the transfer.
- A record of any fault handled on your account and how it was fixed.
- A search of Agud’s historical archive, not only the current display.
- A clear answer: was the loan transferred, sold, assigned or repaid, and who is the creditor today.
How to file a complaint
The first step is the bank’s public enquiries unit. According to Mizrahi Tefahot’s corporate responsibility report, every enquiry gets a full answer within 45 days, and in exceptional cases within 60 days. If the answer is not satisfactory, you can turn to the Public Enquiries Unit of the Banking Supervision Department at the Bank of Israel and attach the bank’s reply. Details in our guide to filing a complaint against Mizrahi Tefahot.
Questions and answers
When did Bank Agud merge into Mizrahi Tefahot?
Mizrahi Tefahot bought all of Bank Agud’s shares on September 30, 2020. Customers were moved gradually from 2021, the remaining customers were converted in November 2022, and the statutory merger was completed on December 29, 2022.
Were there problems in the transfer from Agud to Mizrahi Tefahot?
Yes, according to the banks’ own reports. Bank Agud’s final report says faults "were handled ad hoc", and Mizrahi Tefahot wrote that for some customers the transfer "was not completed optimally".
How many complaints were filed about the Agud merger?
615 complaints at Mizrahi Tefahot in 2022 under "Other (Agud merger)" and 540 in 2023 under "Other (including Agud merger)". Bank Agud itself received 468 complaints in 2022.
Sources
- Mizrahi Tefahot public enquiries report, 2022 (Hebrew)
- Mizrahi Tefahot public enquiries report, 2023 (Hebrew)
- Bank Agud financial reports: final report as of December 29, 2022 (page 7) and June 2022 report
- Mizrahi Tefahot corporate responsibility report 2022, pages 53 and 55
- Summary of the merger agreement, Registrar of Companies file
Based on the official reports of Bank Agud and Mizrahi Tefahot. Quotations are translated from the Hebrew originals. This is not legal advice.