| Doubtful debt - A debt or part of a debt regarding which, after the debtor’s economic position-including the nature of his assets and his repayment ability-has been assessed, and after the collateral in the possession of the banking corporation has been evaluated, the banking corporation’s management determined that there is no longer any reasonable chance of collection and that it should be recorded as an expense in the banking corporation’s books. |
|
|
| Earmarked loan - a loan granted by arrangement with the government, the Jewish Agency, the World Zionist Organization, a municipality, or one of the following companies: Halamish-Government and Municipal Company, Prazot, Shikmona, LORAM-Lod and Ramleh District Development Company, Heled, and Amidar-Israel National Housing, whether the loan is granted from earmarked deposits of the said entities or whether via the banking corporation. |
| Effective average cost of debit balances in overdraft and other current accounts - including the following components: |
| 1. |
Ordinary interest rate (see definition); |
| 2. |
Additional interest charged on balances in excess of agreed limits; |
| 3. |
Credit-allocation fees, |
| calculated from the actual charges for the above components on all customer accounts of the seven major banks. |
| Effective average cost in annual terms - calculated as follows |
 |
| where: |
| A |
is the monthly cost calculated as follows: income (expense) during the month divided by the average balance; |
| DP |
is the number of days in the computation period, calculated as follows: for credit in overdraft accounts, term credit (not on-call), the discount-window loan, current accounts with credit balances, and deposits with the Bank of Israel, DP is the number of days in the quarter; for on-call credit, pahak, and inter-bank deposits, DP equals 7; for time deposits, and Treasury bills, DP is calculated each month according to data from the Supervisor of Banks and the Monetary Department of the Bank of Israel; |
| DM |
is the number of days in that month; |
| DY |
is the number of days in the year. |
| The cost is based on actual debits and credits of customers’ accounts. |
| |
|
|
| Equity-holders’ loans - loans which are subordinated to other claims, and other loans of a capital nature. |
| Equity - paid-up share capital, acceptances on account of shares (only when there is an irrevocable obligation to buy and allocate the shares),.perpetual liabilities, funds, profit including other, surpluses, and dividends proposed or declared after the balance-sheet date. |
| Expenses on bonds - including interest, indexation and exchange-rate differentials, and issue expenses of bonds relative to the principal's balance each year (less reimbursement of issue expenses), reduced by the proportion of the premium and the discount on bonds issued. |
| Extraordinary expenses - see Extraordinary income and expenses. |
| Extraordinary income and expenses - including income and expenses arising from activities other than normal for the banking corporation, and which are not undertaken on a regular basis; including provision for expected losses on assets which the banking corporation’s management has decided to sell or which are not in use. |
|
|
| Fair value of a financial instrument - the amount for which an asset can be bought or sold (a liability incurred or repaid) in a current transaction between willing parties, i.e., a sale that is not a forced sale or a sale during a liquidation. Market prices quoted in active markets are the best proof of fair value, and if readily determinable, should be used as the measurement base. If a quoted market price is readily determinable, the fair value is the product of the number of tradable units and the market price. If no quoted market price is readily determinable, the estimate of fair value must be based on the best information available in the circumstances. One example of a method of estimation is the current value of the estimate of expected future cash flows, using capitalization rates appropriate to the risks incurred, and option-pricing models. Estimation methods used for measuring assets and liabilities must be consistent with the purpose of measuring fair value. In the implementation of these methods, use should be made of the assumptions made by participants in the market to determine their estimate of value, future income and future expenses, including assumptions about interest rates, breach/nonfulfillment of an essential condition in the credit agreement, early repayment and volatility. In measuring forward contracts, such as foreign-currency forward contracts according to fair value by capitalizing estimated future cash flows, the banking corporation must base its estimate of future cash flows on changes in the forward rate (and not in the spot rate). In measuring financial liabilities and nonfinancial derivatives that are liabilities according to fair value by capitalizing estimated future cash flows (or payments of assets of equal value), the purpose is to use capitalization rates that would clear these liabilities in an arm's length transaction. In this regard: |
| "active market" means a stock exchange and any over-the-counter market in which regular trading in the financial instrument is carried on; |
| "over-the-counter market" means a dealer market in which dealers buy and sell on their own account or a broker market in which dealers broker and liaise between buyers and sellers; |
| regarding shares the existence of a readily determinable fair value is conditional on the existence of a market price determined by the stock exchange, or, with regard to shares traded in over-the-counter markets is conditional on the publication of a market price for the share as follows: in the US, on Nasdaq or by the National Quotation Bureau; in other countries: in markets where the extent of activity therein is comparable to the above. |
| Fees on financial transactions - including fees for acceptances, credit guarantees, and documentary credits. |
| Financial capital - equity capital less net nonfinancial items. |
| Financial institution - as defined in the Banking (Licensing) Law, 5741-1981. |
| Financial instrument - cash, proof of ownership in a corporation or a contract satisfying the following two conditions: |
| 1. |
It imposes a contractual obligation on one party |
| |
a. |
to transfer cash or other financial instrument to the second party, or |
| |
b. |
to exchange other financial instruments with the second party under terms likely to be unfavorable to the first party. |
| 2. |
It grants the second party a contractual right |
| |
a. |
to receive cash or other financial instrument from the first party, or |
| |
b. |
to exchange other financial instruments with the first party under terms likely to be favorable to the second party. |
| Foreign banks (in the return on deposits in overseas offices) - all banks whose head offices are abroad (including banks in the host country of the overseas office), excluding banking subsidiaries of Israeli banks, which for purposes of this return are considered Israeli banks. |
| Forward contract - a contract between two parties for the sale of a specified quantity of an asset at a particular price on a stipulated future date (the settlement date). The contract is binding on both parties to the agreement. A forward contract is not a standard contract and is not traded on capital markets, but is drawn up specifically according to the parties' requirements. |
| Futures contract - a contract between two parties for the sale of a specified quantity of an asset at a particular price on a stipulated future date (the settlement date). The contract is binding on both parties to the agreement. A futures contract is a standard contract traded on capital markets. |
|
|
| General provision for loan losses - the provision made during 1985-92 as a percentage of all customer indebtedness and which served as a reserve for unidentified risks implicit in all customer indebtedness. Banking corporations continue to maintain the balance of the provision to an amount not in excess of 1 percent of all customer indebtedness on December 31st, 1991. |
| Gold - gold coins, gold bars, and certificates conferring rights to gold coins or bars, held for the bank’s own account. |
| Gross negative fair value - the sum total of the fair values where the bank owes money to its counterparties, without taking into account netting. This represents the maximum losses the bank's counterparties would incur if the bank defaults and there is no netting of contracts, and no bank collateral was held by the counterparties. |
| Gross positive fair value - the sum total of the fair values of contracts where the bank is owed money by its counterparties, without taking into account netting. This represents the maximum losses the bank could incur if all its counterparties default and there is no netting of contracts, and the bank holds no counterparty collateral. |
| Gross weighted capital - equity at the beginning of the year, plus issues weighted according to the time of issue during the year. |
|
|
| Hedge derivative - a derivative designated by the bank's management as a hedge, provided it qualifies as such. This applies when the nature of the risk exposure of the hedge is identical to that of the hedged item. The hedged item must be identified precisely. At the beginning of the hedging there is formal documentation of the hedge ratio and of the objective and strategy of the banking corporation's risk management in creating the hedge, including identification of the hedge instrument, the hedged item, the nature of the hedged risk, and the method used to assess the effectiveness of the hedge instrument offset by the exposure to changes in the fair value of the hedged item, which exposure can be related to the hedged risk. The method the banking corporation intends to use to assess the effectiveness of the hedge instruments requires a reasonable basis. |
|
|
| Income from credit - including income from interest, and from indexation and exchange-rate differentials; nonrecurring commission which is charged not for a specific service nor as repayment of special expenses, but as an addition to interest; allocation fees for credit facilities which refer to the reporting period. |
| Income from bonds - including accrued interest, indexation and exchange-rate differentials on bonds, plus the proportion of the discount or less the proportion of the premium. Profit and loss from the sale of the investment in bonds and from the adjustment to fair value of bonds for trading are to be shown under Other financing income and expenses. (Profit from the sale of bonds available for sale not within sixty days from the date of purchase of bonds with the same properties are to be recorded in the profit and loss statement at the time of sale. Losses from the sale of bonds available for sale are to be recorded in the profit and loss statement at the time of sale.) |
| Indebtedness under special supervision - including: |
| 1. |
Indebtedness over which the banking corporation's management consider it necessary to intensify monitoring and supervision, although it does not expect a credit loss to derive from it. Such a need may arise from considerations related to industry or regional developments, or from specific considerations related to the financial robustness of the debtor, the extend and quality of the information in the hands of the banking corporation regarding the debtor and his business activity, the situation regarding his collateral, arrears in debt repayments, the debtor's relations with other entities considered problematic, etc. |
| 2. |
The balance of indebtedness of a borrower another part of which is defined as a problem debt under a different classification. |
| Interest - interest, indexation differentials (including exchange-rate indexation differentials), and exchange-rate differentials on foreign-currency-denominated balances. |
| Investments in subsidiaries and affiliated companies - including shares, payments on account of shares, warrants, convertible securities, subordinated letters of liability, and equity-holders’ loans to subsidiaries held for investment and not for trading. |
|
|
| Joint services company - as defined in the Banking (Licensing) Law, 5741-1981. |
|
|
| Labor force and salaries - annual average, based on the number of employees/employee posts at the end of each month for the twelve months of the year which has ended. |
| Loan-loss provision - see Provision for loan losses. |
| Loans from the Bank of Israel - (monetary) loans in local currency and other loans. |
| Loans with variable interest rates - |
| 1. |
When the date of a change in the interest rate is known and the future interest rate is not known, the repayment date is taken as the date on which the new interest rate becomes or could become effective. |
| 2. |
When neither the date of a change in the interest rate nor the future interest rate is known, the credit or deposit are reported on the date the credit is granted or the deposit is made and on the date the new interest rate becomes effective. |
|
|
| Maintenance and depreciation of buildings and equipment - including rent, depreciation of buildings and equipment, property taxes, security and insurance expenses and repairs (all these for assets used by the banking corporation). |
| Means of control in a corporation ((as defined in the Banking (Licensing) Law), - all of the following: |
| 1. |
Voting rights at a company’s General Meeting or in the equivalent body of another corporation; |
| 2. |
The right to appoint a corporation’s directors. In this respect |
| |
a. |
whoever appointed a director of the corporation is regarded as having the right to do so, and |
| |
b. |
a corporation which appoints one of its officials as director of another corporation is presumed to have the right to make the appointment. |
| 3. |
The right to participate in a corporation’s profits; |
| 4. |
The right to a corporation’s residual assets when it is being liquidated, after its obligations have been met. |
|
|
| Nonresident - anyone who is not defined as a resident. |
| Notional amount - the number of currency units, shares, units of measurement of commodities (e.g., bushels, pounds) or other units specified in the derivative. |
| Number of accounts - see Accounts. |
| Number of employee posts - full-time positions. Part-time employees are counted on a proportional basis; overtime is not included in the calculation. All employees are included except those on unpaid leave. Employees on loan from another bank in the group or another branch are reported by the branch to which they are on loan, and not by the bank or branch from which they have been seconded. |
|
|
| Off-balance-sheet credit risk - as calculated for purposes of setting the limit of a borrower’s indebtedness as defined below-the sum of the following: |
| 1. |
Guarantees, acceptance of notes, rediscounting of notes, documentary credit, and liability to pay money on behalf of a third party. |
| 2. |
Futures transactions-the sum of the following: |
| |
(a) |
10 percent of the balance of futures transactions. |
| |
Futures transaction-each of the following, whether the banking corporation is a party to the contract or a guarantor: |
| |
(i) |
A futures or forward transaction in a currency which is legal tender or in the currency basket, in goods, securities, or rights; unless there is another futures transaction of the same type with the same customer which will be offset against the first contract at settlement; |
| |
(ii) |
Swap transaction in interest or other yields, including indexation or exchange-rate differentials; |
| |
(iii) |
A future rate agreement or forward rate agreement; |
| |
(iv) |
Purchase of an option by the banking corporation to buy or sell one of the assets in this clause; |
| |
excluding: |
| |
(i) |
A transaction in a contract traded on the stock exchange, in which the exchange clearing-house is responsible to the customer for settlement, and for which the margin must be adjusted daily. |
| |
(b) |
The balance of a futures transaction with a customer, of the type specified in sub-clause 2(a)(i) above, which on settlement will be netted against an opposite futures transaction of the same type with the same customer, in the amount due from the customer after netting. |
| 3. |
The amount of the banking corporation’s liability to the Maof (Futures and Financial Instruments) clearing-house for securities which the customer pledged, as set out in the bylaws of the Maof clearing-house. |
| 4. |
A banking corporation's commitments (including conditional) to grant credit or issue a guarantee, excluding such commitment whose realization is conditional on the receipt of collateral that serves as deductions, to the amount of the credit or guarantee. |
| |
All the above is subject to the following: |
| |
(a) |
If the commitment to grant credit or to issue a guarantee is conditional on the repayment of another credit or guarantee, the amount of the indebtedness shall not exceed that of the larger of the two, provided that the banking corporation ascertains that that the commitment cannot be realized without reducing the existing credit or guarantee by the same amount. |
| |
(b) |
A commitment to grant indebtedness shall not be weighted by a greater weight than the final indebtedness itself, if realized. |
| |
(c) |
A commitment to grant credit or issue a guarantee regarding which it is specifically stated in the agreement with the borrower that it will be realized only if it does not result in a deviation from the borrower or group of borrowers limitation shall not be considered indebtedness provided the banking corporation ascertained that the commitment cannot be realized if it results in a deviation from the borrower or group of borrowers limitation by the same amount. |
| 5. |
Fifty percent of all commitments as underwriter within their meaning in Directive no. 321 in the Directives on the Proper Conduct of Banking Business regarding Underwriting of Securities Issues. |
| |
|
|
| Office - any premises at which banking business is transacted-head office or branch. |
| Offices of the bank in Israel - including offices in Judea and Samaria. |
| On-call credit - credit granted for several days and repaid on call, in accordance with the conditions of the agreement between the bank and the customer. |
| Operating fees - fees for services. |
| Operating segment - A part of a banking corporation with the following three features: |
| |
(a) |
It engages in business activities from which it is likely to earn income and incur expenses (including income and expenses deriving from transactions with other parts of the same banking corporation). |
| |
(b) |
The results of its actions are examined regularly by the management and board of directors with the purpose of making decisions regarding the allocation of resources to the segment and the assessment of its performance. |
| |
(c) |
There is separate financial information about the segment. |
| In addition, the operating segment must satisfy at least one of the following quantitative requirements: |
| |
(a) |
The reported income of the segment, including from inter-segment transactions, constitutes at least 10 percent of the aggregate income of all reporting operating segments, including from inter-segment transactions. |
| |
(b) |
The results of the segment, in absolute terms, is at least 10 percent of the larger, in absolute terms, of i) the aggregated reported profit of all operating segments that did not report a loss, and ii) the aggregated loss of all operating segments that reported a loss. |
| Option - options are divided into purchase (call) options and sell (put) options. A call option is the right to buy a specified asset at an agreed price (strike price) up to (US) or on (Europe) a stipulated date. A put option is the right to sell a specified asset at an agreed price (strike price) up to (US) or on (Europe) a stipulated date |
| Ordinary banking corporation - a banking corporation appearing in the list on page xi in the Introduction tto this publication. |
| Ordinary interest rate - (see Effective average cost of debit balances in overdraft and other current accounts.) Interest set for a customer consisting of the basic rate plus risk premium (according to the bank’s assessment of the customer). |
| Other assets - including |
| 1. |
Deferred taxes receivable (less deferred taxes payable); |
| 2. |
Severance, retirement, pension, and vacation funds (less appropriate provisions); |
| 3. |
Intangible assets; |
| 4. |
Assets received as credit repayment; |
| 5. |
Balance of amortization expenses (for bond issues, subordinated notes, long-term and other deposits); |
| 6. |
Surplus of advance income tax payments over current provision for income tax; |
| 7. |
Debit balance for derivatives. |
| 8. |
Other debtors and debit balances (see definition). |
| Other credit ((in return on effective cost) - see Overdraft and current accounts with debit balances, and other credit. |
| Other creditors and credit balances - including |
| 1. |
Creditors for expenses payable; |
| 2. |
Current interest on subordinated notes accrued by the balance-sheet date; |
| 3. |
Loan-loss provision (specific for customers’ liabilities not included in the balance sheet, e.g., guarantees); |
| 4. |
Excess of market value over the pre-loan book value of securities loaned; |
| 5. |
Difference between market value of securities sold short and proceeds received from sale of securities borrowed. |
| |
|
|
| Other debtors and debit balances - including |
| 1. |
Debtors for income receivable (excluding interest included in the relevant balance-sheet item); |
| 2. |
Expenses paid in advance; |
| 3. |
Gold (see definition); |
| 4. |
Amounts in transit. |
| Other derivative - a derivative which is not a hedge or an ALM. |
| Other financing expenses - including penalties or interest to the Bank of Israel for deviations from the Liquidity Regulations. |
| Other financing income - including |
| 1. |
The banking corporation’s profits on transactions in derivative financial instruments; |
| 2. |
Fees for early repayment of credit; the banking corporation’s income from fees for early repayment after deduction of the proportion related to amortized financial capital (see definition) included in the profit and loss statement at equal rates over the period remaining to the repayment date, or within three years of the repayment date, whichever is shorter; |
| 3. |
Reduction of loan-loss provision; |
| 4. |
Interest collected on problem debts. |
| 5. |
Interest collected on housing loans in arrears. |
| 6. |
Profit and loss from the sale of bonds and from adjustments to fair value of bonds for trading. |
| Other guarantees and liabilities - liabilities in customers accounts that are not guarantees to secure credit, nor guarantees to house purchasers, nor liabilities arising from credit card use for which the customers are liable, nor commitments to grant approved credit not yet given.` |
| Other liabilities - including |
| 1. |
Provision for deferred taxes (offset by deferred taxes receivable); |
| 2. |
Provision for pensions and severance pay (offset by funds earmarked for these purposes); |
| 3. |
Current provision for income tax (offset by advances paid); |
| 4. |
Income received in advance, excluding income to be deducted from the relevant credit items; |
| 5. |
Returnable receipts for shares not yet allocated; |
| 6. |
Returnable receipts for options not yet allocated; |
| 7. |
Credit balances for derivative instruments; |
| 8. |
Accounts payable for credit card activities. |
| 9. |
Other creditors and credit balances (see definition). |
| Note: In the monthly balance sheets the data on other liabilities include balances for accounts payable for credit card activities only from December 2006. In the reports on rates of income and expenses by indexation (based on financial reports to the public and the profit and loss account submitted to the Supervisor of Banks), the data on other liabilities do not include these balances. |
| Overdraft account - current account for which an overdraft facility has been arranged in advance and on which credit-allocation fees are paid. |
| Overseas banking office - overseas representative office, agency, branch, or banking subsidiary. |
|
|
| Parent company - aa company of which the reporting banking corporation is a subsidiary. |
| PAZAK Time deposits - local currency unindexed deposit for a fixed term, short term, or even one day, at fixed or floating interest, for a period defined in advance, of an agreed amount, at an agreed interest rate and under agreed conditions as determined with the customer at the time the deposit was made. |
| The deposit can be once only, or can be renewable from time to time with the possibility of partial or full withdrawal of the principal and/or interest on the renewal dates. |
| PAHAK - see Current deposit account. |
| Principal industries - classification |
| 1. |
Based on Central Bureau of Statistics definitions. |
| 2. |
Credit to the public by principal industries is classified according to the main industry in which the borrower is active. |
| Private persons - individuals who are not corporations (registered or unregistered) and who are not engaged in business activity. |
| Problem borrower - a borrower with a problem debt. |
| Problem debt - a debt under special supervision, a debt in temporary arrears, a debt which has been restructured or is a debt regarding which restructuring has been approved but not yet executed, a debt not accruing income, or a debt which has been determined to be doubtful in full or in part. |
| Provision for loan losses - specific additional and general provisions. The specific provision for loan losses on off-balance-sheet items (e.g., guarantees) is included in the balance sheet under ‘other liabilities (other creditors and credit balances)’, and not deducted from credit. When portions of the general provision and the additional provision for loan losses calculated on the basis of the off-balance-sheet items of customer indebtedness are substantial, they are also recorded as ‘other liabilities’ instead of being deducted from credit. The amount of these provisions is deducted from customers' aggregated lliabilities (for guarantees, etc). |
| Public - individuals and corporations, excluding the government and foreign governments. |
|
|
| Rate of interest on credit - the yield received by the bank. For example, for loans subsidized by building contractors, the full interest rate received by the bank is reported, i.e., the rate of interest collected directly from the customer plus the rate of interest which the bank receives from the contractor. |
| Refused check - a check submitted for payment on or after its date, and which the bank refuses to honor because of insufficient funds in the account and which it is not required to honor on the basis of an agreement with the drawer, regardless of whether there was an additional reason for the refusal or whether a cancellation order was issued. |
| Related company - a parent company, subsidiary company, affiliated company, and a corporation controlled by these companies. |
| Representative office - overseas office at which one or more persons represent the bank in the host country. The activities of such an office are restricted to establishing contacts with customers and transmitting information; it is not authorized to conduct banking business. |
| Resident - |
| 1. |
An Israeli citizen, or anyone who is in Israel or in the area by dint of an immigrant visa, immigrant certificate, or permanent resident certificate, excluding Israeli citizens permanently resident abroad. Hence, an Israeli citizen who spent a period of no more than sixty days in Israel or the area during the twelve months prior to any activity as defined in the Currency Control Law is defined as a nonresident for purposes of the currency control provision. |
| 2. |
A corporation which according to any law in Israel or the area is registered or which must be registered in an official registry, or anyone who is not an individual and whose main activity is in Israel or in the area. |
| In this definition "the area" refers to Judea, Samaria and the Gaza Strip, excluding the areas under Palestinian civil responsibility. |
| Restricted account -an account on which checks cannot be drawn. An account will be restricted and its owner will be restricted if ten or more checks drawn on the account within one year were not honored. The restriction will apply for a period of one year. Account herein refers to a local-currency checking account. |
| Restricted customer - an individual or corporate entity who has a restricted account. A restricted customer may not draw checks on a restricted account and may not open a checking account. Account herein refers to a local-currency checking account. |
| Rights of minority shareholders - including rights in capital, funds, and surpluses of consolidated subsidiaries. |
| Risk-based capital ratio - the ratio of capital to risk asset, calculated according to the recommendations of the Basle Committee on Banking Supervision. The method of calculating capital (detailed in Directive 311 of the Directives on the Proper Conduct of Banking Business of the Banking Supervision Department) is based on dividing capital into Tier 1 (or core) capital, Tier 2 capital and Tier 3 capital. Tier 2 capital is further subdivided into two types that together may not exceed a certain proportion of Tier 1 capital; Tier 3 capital serves to cover market risk only. The following are deducted form the capital: |
| (a) |
Investments of the banking corporation- |
|
(1) In shares and subordinated notes of subsidiaries whose financial statements are not consolidated in the consolidated financial statements of the banking corporation; |
|
(2) In shares and subordinated notes of affiliated companies which are not real bodies corporate, unless the Supervisor of Banks has confirmed that investments in them shall not be deducted from the capital; |
|
(3) In subordinated notes (including securities backed by subordinated notes) of another banking corporation; |
| (b) |
Financing for the purchase of subordinated notes (including securities backed by subordinated notes) of another banking corporation. |
| (c) |
A lien on subordinated notes (including securities backed by subordinated notes) of another banking corporation, the quantity of which in each account of a particular customer exceeds NIS 1 million. |
| The weighted total of the risk assets in the business of banking corporations is the total of: |
| a. |
the balances of all the assets included in the balance sheet and the off-balance-sheet items, weighted by their level of credit risk. |
| b. |
the product of the requirement for capital for exposure to market risks, calculated in accordance with Directive 341 of the Directives on the Proper Conduct of Banking Business of the Banking Supervision Department and the inverse of the minimum capital ratio, i.e., 1/0.09. |
|
|
| Salaries and related expenses - including |
| 1. |
Salaries and pensions; |
| 2. |
Related expenses, including national insurance contributions, current provision for retirement and severance compensation, retirement and vacation pay, and compensation payments for which no provision was made in the past; |
| 3. |
Payments to employees who are not on the regular payroll, those on loan from another company in the group, and payments for labor services made directly to companies that supply personnel; |
| 4. |
Payroll tax and employers’ tax; |
| 5. |
The difference between supplementary provisions related to past periods for severance, retirement, and vacation pay and income from the appropriate funds. |
| 6. |
Benefits to employees arising from issues of shares, warrants, and rights, or from a sale offer made by a controlling shareholder in the banking corporation. |
| |
|
|
| Savings - see Savings schemes, balance. |
| Savings schemes, balance - The balance relates to the last day of the month. The revaluation of indexation to the CPI is calculated in accordance with the guidelines for preparing reports to the public. The balance includes the relative part of the grant plus interest and indexation differentials accrued and imputed to the profit and loss account. |
| Securities - iincluding bonds and shares |
| Securities available for sale - securities not classified as bonds held to maturity or as trading securities. |
| Self-renewing overnight (SRO) deposits - see Current account deposit. |
| Settlement movements - kvutzot (collective farms worked as cooperatives), kibbutzim, and moshavim (cooperative settlements), regional and country-wide purchasing organizations, national financing funds, regional factories owned by purchasing organizations, country-wide marketing companies, etc. |
| Specialized banking corporation - mortgage bank, investment finance bank, or financial institution, as defined in the Banking Law. |
| Specific provisions for loan losses - these are calculated in accordance with Regulation 314 of the Proper Conduct of Banking Business. A mortgage bank determines the provision for housing loans in accordance with the extent to which borrowers are in arrears. |
| SROs - see Self-renewing overnight deposits. |
| Subordinated notes - letters of liability the rights of which are subordinate to the claims of all the other creditors of the banking corporation, except for letters of liability of the same kind. |
| Subsidiary - a company, 50 percent or more of whose nominal issued share capital, or voting rights, or the right to appoint at least half of its directors, or the right to appoint its ceo, are held by a banking corporation. |
| Subsidiary or affiliated company - aa consolidated company or company included on an equity basis. |
| Supplementary loan - a loan which is not an earmarked loan granted from the banking corporation’s freely loanable funds to someone who has been granted an earmarked loan, in addition to the earmarked loan and for the same purpose. |
| Swap -a series of forward contracts or a series of futures contracts for several stipulated periods in which two parties agree to exchange cash flows on a notional amount. For example, a contract in which one party will receive constant interest of 5 percent on NIS 1 million for six quarters starting from the quarter that ends say on 31stMarch, while the second party will receive prime plus 2.5 percentage points on the same principal for the same periods. |
|
|
| Trading securities - securities purchased and held with the intention that they will be sold soon (and are thus held for short periods).Trading activity is usually reflected in lively activity in buying and selling, and its purpose is generally to derive profits from trading-the difference between the bid price and the asking price (the bid-offer spread), the difference between wholesale and retail prices, short-term price changes , etc. |
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