Direct Finance Profit Drops 26% Amid Mortgage Activity Weakness
Translated & summarized from Ice by baba
Direct Finance's net profit for the third quarter of 2026 fell 26% to NIS 49.3 million due to weakness in its mortgage business. While mortgage profits dropped 64%, vehicle financing profits surged 43%, becoming the main profit driver. Despite the quarterly decline, the company's net profit for the first nine months of 2026 is up 69%. Investors are focused on the company's ability to maintain mortgage profitability.
The story in 5 lines · by baba
- Direct Finance's Q3 2026 net profit fell 26% to NIS 49.3 million.
- Mortgage business profits decreased by 64% in the third quarter.
- Vehicle financing profits rose 43%, becoming the primary profit source.
- The company's net profit for the first nine months of 2026 increased by 69%.
- Investors are concerned about the sustainability of mortgage sector profitability.
Direct Finance, led by CEO Eran Golan, reported a significant decline in net profit for the third quarter of 2026, with earnings falling 26% to NIS 49.3 million compared to NIS 66.7 million in the same period last year. This downturn is attributed to a slowdown in the company's mortgage business, which had previously been a key growth driver.
The company's financial results highlight a divergence between its two main operational areas. While mortgage operations saw a substantial profit drop of 64% to NIS 15.3 million in the third quarter, vehicle financing loans experienced a notable improvement, with profits rising 43% to approximately NIS 34 million. This shift made vehicle financing the primary profit source for Direct Finance in the third quarter, a contrast to the first half of the year when mortgages were dominant.
Despite the quarterly dip, Direct Finance's performance for the first nine months of 2026 remains strong, with net profit reaching NIS 177.1 million, a 69% increase year-over-year. This cumulative growth underscores the quarterly volatility of credit companies' results.
Investors are closely watching Direct Finance's ability to sustain profitability in its mortgage sector. The company has expanded this area through securitization deals, allowing it to sell loan portfolios and free up capital for new credit. The timing of profit recognition in such deals can impact short-term results, making a multi-quarter perspective crucial for assessing performance.
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