Israeli Credit Card Companies See Record Growth in Cards and Profits Amid Post-Operation Spending Surge
In the second quarter of 2023, coinciding with the end of Operation Iron Swords, Israeli consumers significantly increased spending on malls, flights, and vacations. This surge is reflected in the financial reports of Israel's three largest credit card companies, Isracard, CAL, and Max, showing a combined 5% revenue increase compared to the same quarter last year from credit card and loan activities. Their profits also improved markedly, reversing last year's one-time write-offs.
The companies collectively reported a 6% growth in active credit cards, reaching 12.5 million cards, surpassing Israel's population. Transaction volume rose 10% year-over-year to 162 billion shekels, driven by inflation, economic growth, and a shift from cash to card payments. Isracard leads with 4.8 million active cards, followed by CAL with 4.2 million and Max with 3.5 million. Over the past year, one million new cards were issued, with about 800,000 active, partly fueled by competition among airline loyalty programs: Isracard's Play Card, CAL's PlayAll, and Max Travel.
Non-bank-issued cards are gaining market share, with Max issuing 52% of its cards outside banks, CAL 46%, and Isracard 33%. The companies posted a combined net profit of 264 million shekels in Q2, a significant turnaround from a 137 million shekel loss in the previous year’s quarter. CAL was the most profitable with 104 million shekels, including an 18 million shekel one-time compensation from El Al, followed by Isracard and Max with 80 million shekels each.
Total credit card-related revenues reached 1.6 billion shekels, with net interest income at 735 million shekels. Isracard had the highest quarterly revenue at 954 million shekels, CAL 843 million, and Max 621 million. Despite growth, the companies’ total private and commercial credit extended reached 38 billion shekels, only about 2% of the banks’ 2 trillion shekel credit market. Plans for entering banking remain uncertain; Isracard recently abandoned its bid to acquire the digital bank "Esh," CAL awaits regulatory approval for its sale, and Max has not announced any banking ambitions.
