Who would have believed that the mysterious disappearance of a mother and her daughter during a vacation in Europe would shake a bank in Israel and wipe out NIS 130 million from its market value. On August 12, the story of the disappearance of Mali Yahalomi and her daughter Liel in Vienna erupted. The two vanished without a trace, family members tried to understand what became of them, and the story grew increasingly complicated. But then it turned out that Mali works at Bank of Jerusalem, and the affair took a surprising turn.
Rumors began spreading on social networks linking Yahalomi's disappearance to possible embezzlement of bank funds. There was no evidence of this, but it was enough to panic investors. The following day, on August 13, as trading opened on the Tel Aviv Stock Exchange, Bank of Jerusalem's stock began to plunge, dropping 12.3% at its peak.
Rumors trigger sharp sell-off in Bank of Jerusalem stock
The bank's management moved quickly to halt the declines and reassure investors and customers. CEO Yair Kaplan sent a letter to employees clarifying that "other than the fact that she is a bank employee, no connection was found between the event and the bank." At the same time, an internal check was conducted, at the end of which the bank issued a notice to the stock exchange stating that "no finding was found indicating any unusual actions involving bank funds, its assets, or customer funds."
An unusual reassuring message was also sent to customers, stating that "there is no concern of embezzlement of Bank of Jerusalem customer funds." Management emphasized that Yahalomi had no access to customer accounts and that banking operations were continuing as normal. The efforts succeeded in moderating the fall, and the stock ended the trading day down just over 2%.
On August 14, Mali and Liel were found safe and sound on a bus in Argentina. The investigation revealed that the two had cut off contact of their own accord, and at that stage no suspicion of criminal activity on their part was found. Bank of Jerusalem hoped the story was behind them, but the stock failed to recover.
Despite attempts to reassure customers and investors, the affair was a severe image blow to Bank of Jerusalem. For days its name was linked to serious, unverified suspicions, and rumors continued to preoccupy the public even after the bank clarified that no connection was found between it and the disappearance. Management managed to curb the initial fall, but the damage to its image was much harder to repair.
Since August 12, Bank of Jerusalem stock has lost 8.7% of its value, while the banking index rose by 3.7%. This represents a gap of 12.4 percentage points between the stock's performance and the index, and an erasure of about NIS 130 million from the bank's market value.
Almost two and a half months have passed since the affair erupted. The suspicions spread on social networks were not verified, but the stock has still not managed to return to its level on the eve of the event. Are investors still concerned about the affair, or are there other reasons for the decline in the bank's value?
Low trading volumes and weaker profits offer alternative explanations
"When looking at the credit rating of Bank of Jerusalem's bonds and their spreads, you see they were not harmed and even the opposite," a capital market source said. "So there is no risk in them. The problem with the stock is that it is not traded on the main indices and its trading volumes are very low."
Daily trading volume in the stock stands at only about NIS 90,000, a relatively low sum that allows even small transactions to affect its rate. According to the source, the fact that the credit rating and yield spreads of the bonds were not harmed shows that bond investors do not identify a significant change in the bank's risk, unlike the fluctuations recorded in the stock.
"It is amazing what a media affair not necessarily connected to a small bank can do to it. Especially when it is a bank like Bank of Jerusalem that deals in credit, in risk, for entrepreneurial real estate, for the haredi community, and for minorities, where the general sentiment toward these elements is weak. In the coming days its quarterly reports will be published, and it is possible that the business results will not indicate any problem. Therefore, one cannot necessarily link the business results to the affair, but it is clear that it dealt a severe blow to Bank of Jerusalem's image and stock."
Not everyone in the capital market agrees with the claim that the affair continues to affect the stock price. A senior broker told Walla that, except for the timing of the initial drop, there is no proof of a link between the disappearance and the declines that have continued since.
"All kinds of delusional conspiracies are circulating that have no basis in reality, but their impact on the stock price is marginal. It is simply an uninteresting bank, with low trading volumes and a low return on equity."
There are also those who attribute the drop to the financial results published by the bank on August 17, five days after the affair erupted. Net profit in the second quarter of 2026 totaled NIS 45.1 million, compared to NIS 65.1 million in the corresponding quarter last year, a decline of about 31%. Return on equity also dropped from 17.1% to 11.1%.
According to the reports, the decline in profit stemmed mainly from the narrowing gap between the interest the bank charges on loans and the interest it pays, as well as special income recorded last year that was not repeated this year. However, financial market sources explain that part of the differences between quarters also stems from the timing of transactions, and not necessarily from a decline in ongoing activity.
"In the second quarter of 2026, net profit was NIS 20 million lower than the profit in the corresponding quarter last year," another financial market source said. "The bank's profit derives from activities conducted every year at different dates, such as securitization. Sometimes it is done in the second quarter, sometimes in the third quarter, and that affects results."
According to him, the low trading volumes in the stock explain part of the fluctuations in its price, and the bank's controlling shareholders also do not necessarily care about its exchange rate, as long as the bank continues to make a profit and distribute dividends to them.
"Furthermore, daily volume stands at about NIS 90,000, which is a volume even a housewife could affect. What interests the bank's owners is the dividend and not the stock price. The attempt to link this to the affair of Mali and Liel is out of place."