The largest Israeli Bank – Bank Leumi plans to close down its U.S. diamond and jewellery financing operations. It is looking at a complete pull-out of these operations by end-2014, although it is not in any way laying time-pressure on its diamond clients. The head of the Bank's U.S. division, Shlomo Mosseri, is in talks with each client to allow them to source financing alternatives in a steady and smooth manner.

The decision, though not completely unexpected, has surprised the U.S. Bank management.

The U.S. subsidiary of the Bank is its largest amongst its other global subsidiaries in 20 countries. The Bank has around 12 branches in the U.S.A. The Bank’s president and CEO, Rakefet Russak-Aminoach when appointed in 2012, had made a decision to pull out of financing the diamond industry. The Bank’s diamond branch in Israel had a credit portfolio worth around $400-$500 million. The Bank is also pulling out of its Israel diamond financing by the first quarter of this year.

The U.S. subsidiary - Bank Leumi USA is an American Bank with $3.8 billion in credit and $4.9 billion in deposits. As per the financial data of the first nine months of 2013, the Bank’s profits from its U.S. operations slipped 50 percent, attributed mainly to write-offs of bad loans. The profits were in the range of $20 million in previous years. The Bank’s outstanding credit given to U.S. diamond clients is said to be around $200 million. The Bank's total outstanding credit to public stands at about $75 billion.

The Bank has since recent years been providing to cover for the expenses that might be incurred by its U.S. authorities, following U.S. officials conducting investigations into suspected cases of money laundering and of assisting U.S. customers to evade taxes between the years 2002-2010. The Bank has also paid significant penalties both in Israel and abroad over violations of Anti-Money-Laundering laws.

The Bank, which is partly owned by the government has been criticised by heads of the Israeli diamond industry, for pulling out its long-standing support to the diamond business, which dates back to the sector’s beginning.