Last week, IDB representatives announced a 6.5 per cent rise in quarterly net profit, at NIS 263 million (£46 million).
Bachar, who has led the institution since 2010, believes that Israel has avoided the global financial crisis due to government regulation and foreign investment.
“Israeli banks are well regulated and behave in a responsible way,” he says.
“Some would say that we are regulated too much.
“But in retrospect we have a stable banking system. We saw that our strong regulation system is a good thing.
“Israel didn’t suffer from the financial crisis because of high regulation, so it’s best that we keep it up. Other countries now want more regulation — so it all works in the direction of it being a good thing.”
But Bachar is keen to distinguish state ownership from regulation.
IDB was nationalised by the Israeli government during the 1983 bank crisis. Now 25 per cent is owned by controlling shareholders and 75 per cent public float.
Bachar says bank leaders “are in the business and know how to provide the right service to people. Governments should not control the banks, but they should make them transparent.”
The technology-rich country has continued to attract global investors — and the banks are benefiting.
“Israel has become a country full of innovative ideas. It has a good infrastructure for investment,” says Bachar.
“We also have a very good judicial system, so people know that their contracts can be enforced.”
The country’s turbulent political situation, which increases the risk of business ventures, does not seem to have deterred investors.
“The situation has been here ever since Israel has existed,” reasons Bachar.
“We have learnt to live with it. Even in the middle of a geo-political crisis, we are still making transactions.
“People have learnt that Israel knows how to deal with risks and are still willing to invest — and many of them have been successful.”
The IDB has capitalised on the international interest in Israel-based companies. It has maintained its 260 offices across global financial centres, including New York and London.
Bachar says: “We mainly focus on business in Israel — but it’s economically attractive for us to be overseas.
“Like all systems that provide credit to businesses, we want to expand a necessary service.”
The IDB’s central London branch, which specialises in trade finance, credit and property, has seen an increase in business.
“The London space is not only a base for the UK transactions — but for all continental Europe,” added Bachar.
IDB, formerly known as Eretz Yisrael Discount Bank, was founded by Greek Zionist and World Jewish Congress representative Leon Recanati in 1935. Recanati, a merchant, saw a gap in the banking industry for Sephardic Jews and opened the bank in Tel Aviv with a focus on foreign trade.
The chair of the first Israeli bank to install an external ATM, still believes that the institution’s role is integral.
“Even in the financial crisis, we saw that the economy could not run without the banking system.”
Bachar voiced his views at an event co-hosted by UK Israel Business.
He made a positive impression on Hugo Bieber, the chief executive designate of the leading organisation that promotes economic links between the UK and Israel.
“Yossi provided members with an in-depth overview of the Israeli economy, peppered with anecdotes from his time as director general of the Ministry of Finance,” says Bieber.
