Economy03:35 · 6m ago

Credit Card Firms Intensify Club Wars Amid Isracard Acquisition by Delek Group

Calcalist

Translated & summarized from Calcalist by baba

Key points

01Delek's acquisition of Isracard triggered intense competition in Israel's credit card market.
02Isracard secured El Al's FLY CARD license, issuing 250,000 cards since June with heavy marketing costs.
03Cal responded with FlyAll card, gaining 130,000 customers but facing uncertain profitability.
04Isracard nearly matched Cal's consumer credit portfolio, showing strong growth in auto and business loans.
05Both companies faced increased credit losses and reduced foreign transaction fees due to macroeconomic and security factors.
06Executive reshuffling followed the acquisition, with former Isracard and Cal leaders switching roles, heightening rivalry.

In this story

People

Yafit Griani, Levi Halevi, Itamar Forman, Ran Oz, Yaron Tiktin

OrganizationsIsracard, Delek Group, Cal, El Al, BuyMe, Max, Horev-Harel

PlacesIsrael

The story · English

The recent acquisition of Isracard by the Delek Group has sparked unprecedented competition among Israeli credit card companies, particularly between Isracard and Cal. This rivalry intensified after Delek secured the lucrative license for El Al's frequent flyer credit card, FLY CARD, in March, a key non-bank card in the sector. Since June, Isracard has issued approximately 250,000 FLY CARDs, investing tens of millions of shekels in aggressive marketing, which is expected to reduce pre-tax profits by up to 150 million shekels in 2026. Despite this, Isracard reported a net profit of 15 million shekels in Q2, boosted by a one-time gain from selling its BuyMe holdings, alongside an 11% revenue increase. The company projects annual profits from FLY CARD to reach at least 120 million shekels over the next decade, signaling optimism for both short- and long-term prospects.

In response, Cal swiftly launched the FlyAll card, modeled after Max's Sky Max, attracting around 130,000 customers but also incurring substantial marketing costs. Cal controversially excluded a 23 million shekel marketing grant from El Al as a one-time income, reporting a net profit of 104 million shekels. However, it remains uncertain if Cal's marketing efforts will offset the loss of its major loyalty club.

The competition extends beyond loyalty cards to credit portfolios. Isracard closed a historic gap with Cal in consumer credit, growing its portfolio by 16.6% year-over-year to 9.31 billion shekels, nearly matching Cal's 9.32 billion. Both companies saw significant growth in auto loans, with Isracard's auto credit portfolio rising 31% to 1.67 billion shekels, representing 18% of its private portfolio, compared to Cal's 1.07 billion. Isracard maintains dominance in business credit with a 3.75 billion shekel portfolio, more than double Cal's 1.6 billion. Both firms faced macroeconomic and security challenges, including reduced foreign transaction fees and increased credit losses, which more than doubled for Isracard to 83 million shekels.

The acquisition also triggered notable executive reshuffling. Yafit Griani, former deputy CEO of Isracard, left after meetings with Delek prior to regulatory approval. Shortly after, former Cal CEO Levi Halevi became El Al's CEO, and Griani was appointed Cal's CEO. Meanwhile, Itamar Forman took over as Isracard's CEO. These leadership changes have introduced fresh, ambitious executives with historical rivalries, intensifying the competitive atmosphere.

If the proposed Horev-Harel acquisition of Cal is approved, the market could see even more aggressive competition with new players eager to challenge rivals and reclaim lost ground.

Read the original at Calcalist