Max: A 57% drop in net profit – the capital market

The non-bank credit company MAX has published its financial statements for 2020, which show that following the Corona crisis, the company’s net profit fell by 57%, to NIS 47 million in 2020, compared with NIS 110 million in 2019. The company’s revenues were also significantly damaged and amounted to NIS 1.23 billion, compared with NIS 1.37 billion in 2019.

However, the net profit for the fourth quarter almost doubled compared to the fourth quarter last year and stood at NIS 15 million in 2020, compared with NIS 8 million in the fourth quarter last year. This is despite the fact that the company’s revenues in the fourth quarter decreased by 11.2% and stood at NIS 308 million, compared with NIS 346.8 million last year.

According to the company’s data, the number of credit cards was 2.8 million at the end of 2020, an increase of 3.6%, and the number of non-bank credit cards increased by 5.8% and reached 1.1 million credit cards – that is, when the world returns to normal. The company’s profits will also improve accordingly, as the public will return to consuming more.

The company’s IPO turnover amounted to NIS 79.4 billion, a decrease of 8%, due to a significant decrease in overseas turnover due to the corona crisis and the closure of the sky, as well as closure and restrictions in the economy during 2020 that caused a decline in private consumption. It managed to increase its non-bank IPO turnover in 2020 by about 3.7% compared to 2019.

Be careful when you exceed the credit limit, because if you exceed it – you will pay dearly: The balance of the consumer credit portfolio (private customers) of the company amounted to NIS 5.3 billion at the end of 2020, a decrease of 4.6%, with the average interest rate for late-paying consumers standing at 7.7%, with no significant change compared to 2019. The company’s business credit portfolio is much smaller and amounted to NIS 409 million at the end of 2020, an increase of 4.3% and the average interest rate for businesses was 5.4%, compared with 6.4% at the end of 2019 – a 15% reduction in business credit.

The Israelis remained in the country
According to Max’s data, the closure of the sky and restrictions on flights had, of course, negative consequences for economic activity, when the virus began to spread sharply in transactions abroad (without online) compared to 2019, but over time the gap in transactions abroad narrowed compared to the period Pre-crisis, although the gap is still noticeable even now – and stands at minus 67%.

Max CEO Ron Fainero: “We felt the impact of the ‘Corona Year’ when the public bought less, spent less and of course was restricted in travel abroad. The consumption mix has changed, the public has spent more on food and pharma and less on leisure, culture and entertainment and accordingly the demand for credit has also decreased. In addition, the payments market is “turbulent” – everyone wants access to the hearts of consumers through a wallet. Our money is going digital and the cash age is slowly coming to an end. The field of payments is of interest to both financial and commercial entities. “The volume of online shopping is rising significantly – among other things with the encouragement of the corona, and all this while Israel is finally making the transition to a smart payment infrastructure (EMV).”