Israeli Investment Houses Surge Profits Amid Market Boom and Operational Leverage

Israeli investment houses have become highly profitable cash machines in recent years, benefiting from a booming capital market alongside banks and insurance companies. Their shares have surged by hundreds of percent, driven by operational leverage, where increased managed assets translate directly into higher revenues and profits through management fees. In the first half of 2026, the net profit margin of these firms reached nearly 18%, up from less than 16% the previous year, as their costs grew more slowly than revenues.

Leading investment houses now manage over 1.2 trillion shekels, with assets under management growing 18% in the past year, fueled by automatic saver deposits and a 30% rise in the Tel Aviv 125 index. Five major firms reported a 28% increase in revenues to 3.6 billion shekels and a 52% jump in net profits to 651 million shekels in the first half of 2026. The largest player, Meitav, manages 463 billion shekels and is valued at 9.5 billion shekels, followed by IBI with nearly 6 billion shekels valuation and 125-214 billion shekels managed by others.

Independent trading activities targeting young retail investors have become significant profit centers for Meitav and IBI. IBI’s trading-related revenues rose 46% to 260 million shekels, with profits more than doubling to 104 million shekels, and it added over 7,000 clients in the quarter, aiming for 150,000 by mid-2028. Meitav Trade’s revenues increased 20% to 157 million shekels, with profits up 15% to 38 million shekels, though CEO Ilan Raviv noted seasonal weakness in Q2.

IBI recorded the largest net profit growth of 135% to 159 million shekels, driven by its IBI Capital division’s option management services, especially in high-tech, which grew profits over 4.5 times. CEO Dave Lubetsky attributed this to significant market share gains and client migration from competitors. Meitav posted the highest absolute profit at 274 million shekels, up 47%, while Mor Investments grew profits 25% to 8 million shekels. Altshuler Shaham saw an 8% profit decline to 50.8 million shekels, mainly due to client attrition and lower revenues.