Barclays maintained a positive industry outlook for Israeli banks, citing attractive dividend yields hitting 5%. The brokerage issued specific stock ratings, reaffirming Israel Discount Bank and Bank Leumi as 'overweight' buys while downgrading Bank HaPoalim to 'equal weight'.

The bank projects return on equity between 13% and 17% for the sector through 2027. Israeli banks trade at a 1.3x price-to-book ratio, similar to European peers. Their capital levels remain robust, with common Tier 1 surplus capital strongest at Bank Leumi and Bank HaPoalim.

While valuations are near peak levels, Barclays notes that income metrics—including dividends and buybacks—are central to the investment case. The positive sector view persists even as individual stock ratings are adjusted based on relative valuation and projected returns.