The big credit card companies are a kind of real mirror to the state of the economy. Their income and being eliminated, i.e. the “keepers” https://news.google.com/ the “followers” who sit in any electronic economic action that includes the means of credit, provides a mirror for private consumption expenses. From this information, conclusions can be drawn about broader processes going on in the economy.
So in almost every other case, a 39% drop in annual net profit and a 24.6% drop in revenue in the quarter, would have encountered a general eyebrow-raising. In case of
Isracard
-2.15%
Base:1,165
opening:1,165
High:1,166
low:1,125
change:4,671,300
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less. First of all for the simple reason that people spent less because of the plague, when whole and lucrative sectors like tourism were completely stopped. The company alone lost NIS 155 million in revenue.
As a footnote, a distinction should be made between revenue, and company management and profit margins, and apparently the bottom line in the ratio between pre-tax and post-tax profit, this year has been good, even very good. In the last quarter of 2020, the profit before tax was NIS 66 million, while the net profit was NIS 46 million. This is 9% of the total revenue, which stood at 516 million. It’s not bad at all.
What do Isracard’s numbers say?
In any case, in net numbers, in the fourth quarter of 2020, revenues from businesses fell from NIS 289 million to NIS 267 million. A decrease of 7.6%. Revenues from credit holders decreased by 16%, from NIS 167 million to NIS 140 million, while total revenues decreased by 8% from 561 to NIS 516 million. By the way, the line of expenses decreased from NIS 480 million to NIS 450 million and the net profit decreased from NIS 61 million to NIS 46 million.
Regarding the whole year, The company reported that the turnover of credit card transactions in 2020 amounted to NIS 158.6 billion, compared with NIS 167 billion in 2019. Most of the decline in turnover is attributed, as mentioned, to a sharp contraction in local and global economic activity, a significant decline in credit card activity in various areas and a deterioration in the state of the economy and cardholders following the corona plague.
Total revenues in 2020 amounted to NIS 2.1 billion, compared with NIS 2.3 billion in 2019. A decrease of about 9%. Revenues decreased mainly due to the effects of the corona plague. Revenues from credit card transactions amounted to NIS 1.6 billion, compared with NIS 1.9 billion in 2019, a decrease of 14%. Revenues decreased mainly due to the effects of the corona plague.
Isracard Group CEO Ron Wexler is optimistic. Recently, the board of directors changed and the company, which only in the last year was completely divided from Bank Hapoalim, has big plans for the future, including their very noisy entry into the insurance field.
“We are a mirror image of the economy of the economy’s business and consumer activity. It is clear that Corona had a significant impact. In the end the results are good in relation to the situation. We only showed the decrease in the outbound and inbound tourism budget of NIS 155 million. Credit has grown, “he said Wexler In an interview with BizPortal.
Despite the closures, the economy has shown the ability to cope, and so have you …
“True. But it’s about autopilot, we did quite a bit of streamlining. There was a reduction in salaries for management and expenses for the Knesset, but we also announced a streamlining of a 220 jobs reduction that will be completed by the end of the year, and it does not seem to have full effect this year. Between NIS 44 million and NIS 56 million annually. ”
So the corona was good for business?
“The Corona has made it possible to sharpen some pencils, and made it possible to take steps that could not be taken without it. There was also a boom in eCommerce, we have a unique targeting platform when looking at the effects going forward and also accelerating the electronic payments world. Let us become more efficient.
“The regulator came and told the banks to lower the frame rate. The change is a boost to our ability to provide the customer with an additional framework and additional credit. This creates very great potential for us.”
The market is not getting crowded?
On the contrary, regulation reduces the market. The credit market is competitive, but we leverage our advantages which is a very broad customer base. We understand that 2020 was not as good as the years before, we plan to get into insurance towards the end of the year, I can contact someone I know who is renewing and give him an offer.
“Growth engines are in the areas of consumer credit and later also business, we still do not scratch the potential market share and fractions of% of the business market, so we have a lot of room to grow. Target system that increases business owners the ability to reach more audiences. There is strategy and we aim to build.” Up: (Super app) Continuous digital contact with the customer that will support all growth engines. ”
How do you see the effects of the plague?
“According to the first two months of the year, we see a recovery compared to last year and it is encouraging, with the number of vaccinators saying that business traffic will increase, in the middle of the year it is difficult to predict. At the level of economy openness and ability to move between businesses, including continued adoption of digital tools, so right now The economy is progressing, we need to see what happens with unemployment and grants and the general situation in the economy. ”
“We have to remember that we set out on an independent path from the beginning of the Corona. We are a completely independent company, it was a high-risk pregnancy in light of the Corona. Many moves were made during this period. We got a big expression of confidence from the economy, so when frustrated on the bottom line, it was a year and important.”