Harel Insurance to Award Employees NIS 10,000 Bonus After Record Profits

Harel Insurance Group announced this week that it will distribute a bonus of NIS 10,000 to each of its employees ahead of the Rosh Hashanah holiday. The announcement was made at a company event in Tel Aviv, which also featured a performance by singer Omer Adam. The total cost of this bonus initiative is estimated at approximately NIS 57 million, based on an estimated workforce of around 5,700 employees.

This bonus comes shortly after Harel reported its second-quarter financial results, which were among the strongest in the company's history. Net profit for the second quarter reached NIS 1.024 billion, a 30% increase compared to the same period last year. For the first half of the year, net profit was approximately NIS 1.59 billion, up from NIS 1.33 billion in the first half of 2022. The company's return on equity (ROE) surged to 37% in the second quarter and stood at around 27% for the first half.

The company's core operations also showed growth, with core profits rising 17% to NIS 637 million in the second quarter and reaching approximately NIS 1.2 billion for the first half. Significant contributions came from life insurance, health insurance, and general insurance, with profits of NIS 503 million, NIS 389 million, and NIS 294 million respectively in the second quarter. Growth in capital markets and investments also boosted overall profits.

Harel's asset management division saw its core profits increase by 58% to NIS 131 million in the second quarter. The total assets under management reached about NIS 638 billion by the end of June, marking a 10% increase since the beginning of the year. The credit division also expanded, with core profits of NIS 79 million in the second quarter, a 32% rise, and a credit portfolio of approximately NIS 8.8 billion, up from NIS 6.5 billion a year prior.

In addition to employee bonuses, Harel is returning substantial amounts to shareholders, with NIS 400 million allocated for dividends and a move to quarterly dividend distributions. Since the beginning of 2023, dividends and share buybacks have totaled around NIS 1.5 billion. The employee bonus represents less than 4% of the capital the company has already committed to returning to shareholders this year. Harel's stock has performed exceptionally well, rising approximately 67% year-to-date and 84% over the past 12 months, valuing the company at around NIS 40.5 billion.

Looking ahead, Harel aims for core profits of NIS 3.1-3.3 billion by 2028. The company is also expanding its financial activities beyond insurance, planning to acquire a 50.1% stake in Tulip Capital and is set to hold approximately 20% of Cal (Credit Card Company) as part of Union Group's acquisition deal. This move follows Harel's previous attempts to enter the credit card market.