Isracard Gains 250,000 Play Card Customers Despite Marketing Costs Eroding Profits

Isracard, led by CEO Itamar Forman and controlled by Delek Group, reported strong revenue growth in the second quarter of 2026, reaching 954 million shekels, an 11% increase compared to the same quarter last year. The company posted a net profit of 80 million shekels, a significant turnaround from a net loss of 150 million shekels in Q2 2025. However, these figures were influenced by one-time events: a 65 million shekel dividend from iPlanet following the sale of BuyMe shares this quarter, and a 223 million shekel net expense last year due to a VAT ruling on foreign currency fees. Adjusting for these, Isracard’s core net profit declined sharply to 15 million shekels from 88 million shekels in Q2 2025.

The profit decline mainly reflects increased marketing and investment costs related to Isracard’s acquisition of the Play Card license from competitor CAL in March. Play Card is the credit card for El Al’s frequent flyer club, which has over 500,000 cardholders. Isracard has already issued over 250,000 Play Cards since taking over, while CAL launched its FLY ALL card with about 130,000 customers, and Max increased marketing for its Sky Max card. The company expects marketing expenses to reduce 2026 profitability by 110-150 million shekels before tax but forecasts the Play Card will contribute 120-160 million shekels annually to pre-tax profits from 2027 onward over a decade.

Isracard’s non-bank active card portfolio grew 11.5% to 1.46 million cards by June 2026, with the total group portfolio rising 4% to 4.84 million cards. Transaction volume increased 9.3% to 66.84 billion shekels. Business and consumer credit portfolios expanded nearly 20% to 13.07 billion shekels, with the business segment growing fastest at 27.9%. Consumer credit growth was driven by auto loans secured by vehicle insurance, which rose 31% to 1.67 billion shekels and now represent 18% of the consumer credit portfolio. Unlike competitors, Isracard mainly purchases auto loan portfolios rather than issuing loans directly.

Net interest income increased to 251 million shekels, but interest margins narrowed due to Bank of Israel rate cuts, a shift toward lower-risk products, and higher bank funding costs. Credit loss expenses more than doubled to 83 million shekels, reflecting higher write-offs, though credit quality improved with problematic debts declining in both private and business portfolios. The company is advancing cost-cutting measures aiming to save tens of millions of shekels in 2026 and continues exploring a banking license based on its business account platform and credit portfolio, after withdrawing from a recent bid to acquire Bank esh.