Manif Increases Profits Despite Real Estate Market Slowdown Impacting Credit Portfolio
Manif, a non-bank credit company primarily financing residential projects, reported a net profit of 51 million shekels in the second quarter, marking a 19% increase compared to the same period last year. Revenues remained stable at 129 million shekels. The profit growth was mainly due to a significant reduction in specific credit loss provisions, which dropped to 4 million shekels from 39 million shekels a year earlier.
The company’s credit portfolio stands at 4.8 billion shekels, with 88% allocated to residential projects. A substantial portion of this credit is mezzanine financing provided to developers to complete equity requirements for bank financing, a higher-risk category. Manif is highly sensitive to the residential construction sector, which has been experiencing a slowdown. According to the Bank of Israel, demand for housing loans declined for the sixth time in seven quarters during the first quarter of the year.
This market contraction, driven by high interest rates and reduced demand for new apartments, has forced Manif to adjust repayment terms for developers. In the first half of the year, 18% of the company’s credit agreements had their repayment schedules extended. CEO Maor Doak explained that these extensions reflect longer project timelines due to market conditions and are part of the company’s risk management strategy rather than an increase in credit defaults.
Manif collected 524 million shekels from clients in the first half of the year, including 113 million shekels from new financing agreements. While some outstanding balances are expected to be repaid within the year, exact repayment dates remain uncertain due to delayed payments, insolvency proceedings, and projects requiring extended timelines.
The company’s high exposure to the residential market has weighed on its stock, which has fallen nearly 13% since the start of the year, contrasting with a 13% rise in the TA-Finance Index. Manif is currently valued at 1.3 billion shekels, with controlling stakes held by Menora Mivtachim (49%) and Clal Insurance (9.7%).
