Cal Credit Card Company Reports 10% Profit Increase Amidst Strategic Shifts
תומצת מתוך Calcalist על ידי baba
Cal credit card company reported a NIS 99 million net profit in Q3, a significant increase from a loss last year, driven by a 12% growth in its credit portfolio, especially car financing. The company's credit card business saw growth in active cards but a decline in non-bank transactions due to the transfer of its FlyCard program. The results come as a NIS 3.75 billion sale of Cal was canceled, leading to renewed efforts to sell the company, and impacting a phantom option held by El Al.
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- Cal reported a NIS 99 million net profit in Q3, up from a loss last year.
- The company's credit portfolio grew 12% to NIS 11.3 billion, led by car financing.
- Cal's FlyCard program transfer to Isracard impacted non-bank credit card activity.
- A NIS 3.75 billion deal to sell Cal was canceled, prompting a new sale process.
- The sale cancellation affects a phantom option held by El Al, valued at NIS 192 million.
Cal, the credit card company, returned to profitability in the third quarter of the year, reporting a net profit of NIS 99 million, a significant turnaround from a NIS 88 million loss in the same period last year. Excluding one-time expenses from the prior year, the profit saw a 10.3% increase. The company's revenues grew by approximately 4% to NIS 889 million, while expenses rose by about 2% to NIS 750 million, both figures adjusted for non-recurring costs.
The company's growth was driven by its lending activities, particularly a 12% expansion in its credit portfolio to NIS 11.3 billion. Consumer credit increased by 12.4% to NIS 9.6 billion, largely fueled by a surge in car financing, which has more than doubled in a year to NIS 1.3 billion and now accounts for 65% of the growth in consumer credit. Despite a slight decrease in the average interest rate on consumer credit, net interest income rose by 5.4%.
Cal's credit card operations saw a 6.5% increase in active cards to 4.22 million, with transaction revenues up 1.8% to NIS 610 million. However, the company experienced a decline in non-bank credit card activity, partly due to the gradual transfer of its FlyCard loyalty program operations to Isracard. Cal is attempting to offset this by promoting its new FlyAll club, launched in June with Issta, which has attracted over 200,000 customers.
The company's financial results were released amidst uncertainty regarding its ownership. An earlier deal to sell Cal to Union, owned by George Horesh and Harel, for NIS 3.75 billion was canceled after the Antitrust Authority conditioned its approval on Union selling its holdings in Super-Pharm. Discount Bank, which holds 72% of Cal's profit rights and must divest by April 2027, is now reportedly preparing for a renewed sale process.
Additionally, the cancellation of the sale impacts a phantom option granted to El Al, which entitles the airline to a payment upon Cal's sale or IPO. Cal has informed El Al that its option exercise notice has expired, but El Al maintains its claim. The NIS 192 million liability recorded for this option, based on the canceled deal, has yet to be revalued.
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