In an announcement on Thursday, Pinnacle Financial Partners said it was signing a deal with Arab Bank and the Arab Bank of Israel (Bilath Israel) to build a new multi-billion dollar financial center in Jerusalem, the first major investment by Arab banks in the city.
Pinnacle’s $3 billion investment will provide an investment opportunity for Arab banks and their customers, the company said in a statement.
Pioneer’s investment is expected to bring new jobs, higher productivity, and the ability to attract more foreign direct investment.
Pinnacle said it expects to start operations by the end of 2021.
Arab Bank and Bilath, the largest two Arab banks, signed a Memorandum of Understanding with Pinnacle in November 2021, promising to invest up to $3bn over five years in new projects in Jerusalem.
Pitfalls of investment in IsraelArab Bank is currently the largest bank in Israel, with more than $7 billion in assets.
Israel’s largest commercial bank, the State Bank of the Hebrew Empire, which is the largest lender in Israel with $5.5 billion in reserves, is part of the joint venture.
Arab banks have been a key part of Israeli business since the country’s founding in 1948, and since then have contributed to Israeli economic growth, while supporting a number of other sectors, including construction, tourism and agriculture.