Cal CEO Pushes Growth Initiatives Amid Company Sale Uncertainty

Despite Cal, a credit card company, being up for sale, CEO Yafit Grani is pursuing new growth strategies as if she has years left in her role. While the future ownership of Cal remains unknown, Grani is focusing on expanding the company's operations rather than just maintaining the status quo.

Cal reported a net profit of NIS 99 million for the third quarter, a 10% increase from the previous year when excluding one-time events, with a return on equity of 13.2%. However, for the first nine months of the year, the profit was NIS 281 million, slightly down from NIS 287 million in the comparable period, also excluding one-time impacts. The consumer credit portfolio grew by over NIS 1 billion in a year, and net write-off rates for individual loans decreased from 2.54% to 2.23%.

A significant strategic shift for Cal was the separation from El Al's "Fly Card" loyalty program. In response, Cal partnered with Issta to launch FLY ALL, a joint venture where Cal holds a 20% stake with an option to increase it to 60%. This initiative may signal a move beyond simply issuing credit cards for other companies, potentially allowing Cal to benefit from the economic value of the joint venture's operations and explore new business models in a financial landscape where lines between credit, payments, tourism, and retail are blurring.

Cal has also expanded its car financing operations, a sector it entered less than two years ago. Although car financing typically has lower interest rates and significant competition, it often involves collateral, potentially leading to lower default rates. Grani's challenge is to grow the credit portfolio without compromising its quality, with the recent decrease in write-off rates for personal loans being a positive sign, though its application to car financing needs further evaluation.

In October, Cal announced the establishment of a data and artificial intelligence division, appointing Amir Rosen, formerly of Bank Leumi's AI center, as its VP. This division aims to develop products, improve credit underwriting, and enhance risk management. While Cal possesses extensive data and credit management experience, its success will depend on transforming this into a tangible competitive advantage, as competitors like Isracard, Max, and the banks are also investing heavily in technology and data analytics.

These strategic moves are occurring while Cal's sale is pending. Grani appears to be attempting to increase the company's valuation by demonstrating new revenue streams and growth engines, potentially attracting more interest from potential buyers. However, the ultimate success of these initiatives and their impact on Cal's future under new ownership remain to be seen, as a new owner might implement their own management and strategic priorities.