Michel Siboni, CEO of the Harel Group:
“The announcement of the dividend distribution policy – expresses the strength and financial strength of the Harel Group and our belief that the company can continue to generate profits that will allow all shareholders to share in the company’s success through the distribution of dividends.”The Harel Investments Group announces a dividend distribution policy. This morning, the company’s board of directors approved a new policy whereby the company will distribute a dividend of at least 30% of its total annual profit.
In addition, the subsidiary, Harel Insurance, announced a dividend distribution policy, according to which Harel Insurance will distribute a dividend of at least 35% of its total profit according to Harel Insurance’s annual consolidated financial statements, subject to meeting minimum solvency-based solvency targets 2. (135% considering the deployment provisions and a ratio of 105% without regard to the transitional provisions during the deployment period).
In addition, the company’s board of directors decided on a structural change, as part of which all of Harel Insurance’s holdings in Israel Mortgage Holdings Company Ltd. (EMI), which provides residential credit insurance secured by a mortgage, will be transferred to Harel Investments. In the amount of NIS 310 million from EMI, as well as a current dividend estimated at NIS 40 million per year.
The current dividend, as well as the current dividend received by Harel Investments as a result of its holding in the Group’s provident and pension activities, are part of the basis on which the dividend distribution policy adopted by Harel is based. Following the distribution of such dividends, the cash balances and liquid assets held by Harel Investments will amount to more than NIS 1 billion.
It should be noted that last weekend, the rating company Midroog ranked the Harel Investments Group for the first time. Harel Insurance was rated AA + and Harel Investments was rated Aa2, which actually corresponds to an AA rating.
As part of the rating report of the Harel Investments Group, Midroog noted, among other things: “The company has sound financial flexibility derived from a stable and conservative financial policy in relation to the comparison group, which is reflected in a favorable leverage and coverage ratio in relation to the rating … In our opinion, the company’s financial policy is likely to remain stable and conservative. For liquidity management and strict risk management over time. “