Disappearance of Bank Employee Triggers Market Turmoil for Bank of Jerusalem

On August 12, Mali Yahalomi, an employee of Bank of Jerusalem, and her daughter Liel vanished in Vienna. The next day, August 13, trading opened on the Tel Aviv Stock Exchange and the bank’s shares dropped sharply, reaching a 12.3 % decline at the peak of the sell-off. The episode erased roughly NIS 130 million from the bank’s market value. Two days later, on August 14, the pair were located unharmed on a bus in Argentina, ending the criminal investigation without any indication of foul play.

The Jerusalem Post

Bank of Jerusalem’s chief executive, Yair Kaplan, issued a letter to staff stating that, aside from Yahalomi’s employment, no link to the disappearance was found. An internal audit concluded that there were no unusual actions involving the bank’s assets, customer funds, or employee accounts, and a customer notice reiterated that there was no risk of embezzlement. These communications were intended to stabilize investor confidence and limit further price erosion.

The Jerusalem Post

Although the initial plunge was partially contained, the stock remained depressed. By mid-October, the share price had fallen an additional 8.7 % relative to its pre-event level, representing a cumulative loss of about NIS 130 million. A capital-market source noted that the bank’s bond ratings and yield spreads were unchanged, indicating that bond investors did not perceive heightened risk. The source added that the stock’s volatility is amplified by low daily trading volumes—approximately NIS 90,000—which allow modest transactions to move the price significantly. A senior broker told Walla that, beyond the timing of the initial drop, there is no concrete evidence linking the disappearance to the continued weakness in the share price.

The Jerusalem Post

Some analysts attribute the sustained decline to the bank’s financial results released on August 17. The second-quarter 2026 net profit fell to NIS 45.1 million from NIS 65.1 million a year earlier, a 31 % reduction, while return on equity dropped from 17.1 % to 11.1 %. A financial-market source explained that the profit dip stemmed mainly from a narrower interest-rate spread and the absence of special income recorded in the prior year. Another source emphasized that timing differences in securitization transactions can affect quarterly results without reflecting a fundamental decline in activity. Low trading volumes and the bank’s niche focus on entrepreneurial real-estate, the Haredi community, and minorities further limit price resilience.

The Jerusalem Post

The bank’s upcoming quarterly reports will clarify whether the earnings contraction is temporary or indicative of deeper challenges. While bond markets remain stable, the equity side continues to reflect lingering reputational damage and structural liquidity constraints. Investors appear to weigh both the unresolved image concerns and the bank’s modest profitability when assessing future performance.

The Jerusalem Post