Settlement with U.S. Department of Justice

12 March, 2019

The Board of Directors of Mizrahi-Tefahot Bank Approved the Settlement with the U.S. Department of Justice:

The Bank Shall Pay an Amount of USD 195 Million

The Bank accepted responsibility "according to U.S. law, for the acts of certain private bankers, relationship managers and other employees of similar level of responsibility, who had acted in breach of the Bank's policy and procedures"; the reserve for the investigation, as of the end of the third quarter of 2018, was in the amount of USD 162 million, and the remainder of the amount shall be expensed in the statements for the fourth quarter of 2018; the CEO Eldad Fresher: the completion of the investigation will allow the Bank to focus on the strategic plan's targets including resuming, during the current year, of the Bank's dividend distribution outline

The board of directors of Mizrahi-Tefahot Bank approved this evening the settlement with the U.S. Department of Justice, pursuant to which the Bank shall pay an amount of USD 195 million. By that, a wide-scope investigation, which has been conducted for about five years and which was related to the period of 2002-2012, has been completed.

Since the Bank received, in August 2018, a letter from the Department of Justice, intensive negotiations took place between the parties. At the end of that process, the representatives of the Bank and of the Department of Justice reached an agreement, that the payment to be paid by Mizrahi-Tefahot Bank shall be USD 195 million.

Pursuant to the agreement, the Bank accepted responsibility "according to U.S. law, for the acts of certain former private bankers, relationship managers and other employees of similar level of responsibility, who had acted in breach of the Bank's policy and procedures".

The Bank's Chairman Moshe Vidman and its Board Members expressed their satisfaction from the fact that the negotiation with the U.S. authorities was fruitful, and enabled us to reach an agreed resolution.

The Bank's Chief Executive Officer Eldad Fresher said that reaching the settlement will allow the Bank to focus on achieving the strategic plan's targets, and to resume, during the current year, the Bank's dividend distribution outline.

It should be noted, that the reserve for the investigation as of the end of the third quarter of 2018 was in the amount of USD 162 million, and the remainder of the amount shall be expensed in the statements for the fourth quarter of 2018, which shall be published towards the end of March.

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